Question

Select the correct answer.
A company made a profit of $25,000 over a period of 5 years on an initial investment of $10,000. What is its annualized ROI?
(final value – initial value)
? x 100
initial value
ROI !
ROI
annualized ROI = number of years
A. 50%
B. 25%
c. 30%
D. 40%
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Answer 1

Answer:

Step-by-step explanation:

Given:

Initial Investment = 10,000

Total profit = 25,000

Total number of years = 5 years

Return on Investment = Gain from Investment - Cost of Investment

                                                  cost of investment

ROI = (25,000 - 10,000) / 10,000 = 15,000/10,000 = 1.5 x 100% = 150%

ROI = 150% ÷ 5 years = 30% per year.