Kristin is examining a measure of the financial return the human resources department received for its investment in a new performance appraisal system.The new system cost $3,500 and saved more than $5,000 in payroll expenses.Kristin is examining the ________.
A)economic value added
B)return on investment
C)gain from investment
D)balanced scorecard

Question

Quizplus · Accepted Answer

Kristin is examining the return on investment (ROI), which is calculated by dividing the net gain or benefit of an investment by its cost. In this case, the net gain is the amount saved in payroll expenses ($5,000) minus the cost of the new performance appraisal system ($3,500), which equals $1,500. Dividing $1,500 by $3,500 and multiplying by 100 gives an ROI of approximately 43%. Therefore, the correct answer is B (return on investment).

Kristin Is Examining a Measure of the Financial Return the Human