How do you calculate the return on investment (ROI)?

The return on investment (ROI) is a measure used to evaluate the efficiency of an investment or compare the efficiency of several different investments. This metric helps investors ascertain how much profit they are making relative to the amount they've invested.

To calculate ROI, you take the net profit from the investment and divide it by the cost or initial investment. Then, to express this figure as a percentage, you multiply by 100. This formula succinctly conveys how much profit is generated for every dollar invested, making it easier for stakeholders to assess potential returns against other investment opportunities or benchmarks.

While the other options include parts of the ROI calculation process, they either misrepresent the formula or do not give the final figure as a percentage, which is crucial for comparison purposes. Hence, using (Net Profit / Cost of Investment) x 100 yields the correct and comprehensive calculation for ROI.