Joanna Pauly was delighted to see that her ROI figures had increased for the third straight

year. She was sure that her campaign to lower costs and use machinery more efficiently (en-
abling her factories to sell several older machines) was the reason why. Joanna planned to
take full credit for the improvements at her semiannual performance review.

The Return on Investment (ROI) is a performance measure that indicates the efficiency and profitability of an investment. It is calculated by dividing the net profit from an investment by the initial cost of that investment.

In this scenario, Joanna Pauly noticed that her ROI figures had increased for the third consecutive year. She attributed this improvement to her campaign to lower costs and utilize machinery more efficiently, which also involved selling some older machines from her factories.

If you are wondering how Joanna could calculate her ROI figures, here's how you can do it:

1. Determine the net profit: Calculate the total revenue generated by the investment and then deduct any expenses related to it.

2. Calculate the initial cost: Determine the total cost of the investment, including the purchase price of the machinery, any installation or setup costs, and any additional expenses incurred.

3. Subtract the initial cost from the net profit to find the return on investment.

4. Divide the net profit by the initial cost. Multiply the result by 100 to get the ROI percentage.

Joanna's plan to take credit for the improvements at her performance review is an acknowledgment of her efforts to lower costs and improve the efficiency of her machinery. By effectively utilizing her resources and selling older machines, she was able to generate higher returns on her investment, resulting in increased ROI figures.