ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The most common is net income divided by the total cost of the investment, or ROI = Net income / Cost of investment x 100.

Detailed explanation-2: -Return on Investment (ROI) ROI is the return per dollar invested. ROI is calculated by dividing the dollar return by the initial dollar investment. This ratio is multiplied by 100 to get a percentage. Assuming a $200 return on a $1, 000 investment, the percentage return or ROI = ($200 / $1, 000) x 100 = 20%.

Detailed explanation-3: -Return on Investment (ROI) A calculation of the monetary value of an investment versus its cost. The ROI formula is: (profit minus cost) / cost. If you made $10, 000 from a $1, 000 effort, your return on investment (ROI) would be 0.9, or 90%.

Detailed explanation-4: -Return on investment (ROI) is a performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost.

Detailed explanation-5: -ROI is a simple calculation that shows the amount an investment returns compared to the initial investment amount. IRR, on the other hand, provides an estimated annual rate of return for the investment over time and offers a “hurdle rate” for comparing other investments with varying cash flows.