Glossary of Terms

Return On Investment (ROI) 2015-11-10 08:00:00

Return On Investment (ROI)

ROI measures the amount of return on an investment relative to the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment, and the result is expressed as a percentage or a ratio.

As an example calculation, an investment with a cost of $100,000 that produces $6,500 of net cash flow has an ROI of 6.5%.

 


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