By investing in a John Deere PowerTech engine for $3,200,a pallet manufacturer was able to show a net savings of $500 in annual maintenance costs.Calculate the return on investment for the engine.
A) 1.6 percent
B) 6.4 percent
C) 15.6 percent
D) 21.3 percent
E) 32 percent

Question

Quizplus · Accepted Answer

The return on investment (ROI) is calculated by dividing the net savings or profit by the initial investment cost, then multiplying by 100 to get a percentage. Here, ROI = ($500 / $3,200) * 100 = 15.6%.

By Investing in a John Deere PowerTech Engine for $3,200,a