A security administrator wants to calculate the ROI of a security design which includes the purchase of new equipment. The equipment costs $50,000 and it will take 50 hours to install and configure…

A negative ROI would require the costs to exceed the revenue gain, which is not the case here since revenue ($100,000) exceeds total cost ($55,000).

5.5 percent results from an incorrect calculation, such as dividing the net gain by the revenue figure rather than by the total cost.

45 percent results from dividing the net benefit ($45,000) by the revenue figure ($100,000) instead of by the total investment ($55,000), which is an incorrect application of the ROI formula.

Total cost equals the equipment cost of $50,000 plus the contractor cost of 50 hours times $100 per hour, which equals $5,000, for a total of $55,000. Net benefit is the additional revenue of $100,000 minus the $55,000 investment, equaling $45,000. Applying the ROI formula - ($45,000 / $55,000) x 100 - yields approximately 81.8 percent, which rounds to 82 percent.