roi-calculation

Vocabulary Word

Definition

ROI calculation is a financial metric that’s widely used to measure the probability of gaining a return from an investment. It measures the gain or loss made on an investment relative to the amount of money invested.

Examples in Different Contexts

In project evaluation, 'ROI calculation' is used to measure the financial returns of a project against its costs, aiding in decision-making. A project manager might explain, 'Our ROI calculation indicates this project could yield a 20% return, justifying the initial investment.'

Practice Scenarios

Tech

Scenario:

The software upgrade will undoubtedly improve productivity, but we need to consider if the cost is worth it.

Response:

Agreed. Let's do an ROI calculation to decide whether it will be a cost-effective move.

Marketing

Scenario:

The recent ad campaign has been quite successful, and visibility has increased. We should evaluate to understand the exact financial impact.

Response:

Certainly, a detailed ROI calculation will give us a clear perspective on the ad campaign's fiscal performance.