1. The problem is to verify if the calculation of the return on initial capital investment is correct. 2. The initial capital investment is calculated as the difference between two amounts: $400,000 - 240,000 = 160,000$. 3. The return is calculated as the difference in returns divided by the initial capital investment: $\frac{12500 - 6500}{160000}$. 4. Simplify the numerator: $12500 - 6500 = 6000$. 5. So the return is $\frac{6000}{160000}$. 6. Simplify the fraction: $\frac{6000}{160000} = \frac{\cancel{6000}}{\cancel{160000}} = 0.0375$ or 3.75%. 7. Therefore, the answer given is correct.