ROI Calculator
Calculate Return on Investment (ROI), net dollar profit, and cost-benefit ratios for business ventures, education, real estate, and capital expenditures.
Standard Return on Investment (ROI) Formula
Net Profit = Total Revenue Generated − Total Investment Cost | ROI (%) = (Net Profit / Total Investment Cost) × 100 | Cost-Benefit Ratio = Revenue / Cost- Total Investment Cost: Purchase price plus ongoing operational, acquisition, or renovation costs.
- Total Revenue: All cash flows, sale proceeds, and cost savings generated by the asset.
- Cost-Benefit Ratio: Above 1.0 indicates a profitable venture; below 1.0 signals a net financial loss.
Step-by-Step Worked Example
Calculation Steps:
How to Use This Calculator
Assumptions & Limitations
- Calculates total holding-period return without time-discounting cash flows.
Frequently Asked Questions
What is a good ROI for an investment?
Generally, an ROI that exceeds the historical stock market index benchmark (~8% to 10% annually) or a risk-free Treasury rate is considered attractive for the risk undertaken.
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