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? . A

A company earned a profit of $25,000 over 5 years from an initial investment of $10,000. What is the annualized ROI?

The correct answer from the provided choices that best indicates the annualized ROI is option C) 30%. To determine this, you need to know a few key figures: the initial investment of $10,000, the total profit amounting to $25,000, and the investment duration of 5 years. We can then apply this formula: Return on Investment = (Gain from Investment - Cost of Investment) / Cost of Investment. Multiply the outcome by 100%, then divide by 5, the total years.

I hope this is useful, best wishes.

Well,...
Profit the company made: 25,000 - 10,000

= 15,000

15,000 divided by 10,000 multiplied by 100% = 150%

Given that this was achieved over a period of 5 years, the annualized ROI results in:
150% divided by 5 = 30%

The answer is option C

I hope this clarifies things.