What formula do you use to calculate ROI?
What will be an ideal response?
Return on investment (ROI) is a percentage rate that measures profitability by comparing the total net benefits (the return) received from a project to the total costs (the investment) of the project. Return on investment analysis considers costs and benefits over a longer time span than payback analysis, usually a period of five to seven years.
In many organizations, projects must meet or exceed a minimum ROI, which is an estimate of the return that the firm would receive from investments, such as treasury bonds, or it can be a higher rate that the company requires for all new projects.
ROI is calculated by using the formula: ROI = (Total Benefits – Total Costs) / Total Costs.
For example, if Total Benefits = $213,000, and Total Costs = $181,000, then ROI would be calculated as follows:
ROI = (Total Benefits – Total Costs) / Total Costs
ROI = (213,000 – 181,000) / 181,000
ROI = 32,000 / 181,000
ROI = 0.177
ROI = 17.7%
You might also like to view...
Describe how Samba’s handling of users differs from that of NFS.
What will be an ideal response?
Discuss the use of the Transform Again command.
What will be an ideal response?
The Task Point indicates with a blinking vertical line where text or graphics will be inserted
Indicate whether the statement is true or false
The ________ content control allows the user to select a specific item from a
list, created by the designer of the form. A) List B) Combo Box C) Drop-Down List D) Plain Text