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Return on Investement

Return on Investment, commonly known as ROI, is a financial metric used to measure the profitability and efficiency of an investment or trade. ROI is expressed as a ratio or percentage value and represents the return on an investment relative to its cost.


ROI is a crucial concept in finance and is used to evaluate the performance of an investment. A high ROI indicates that the investment has been profitable, while a low ROI suggests that the investment has not been successful.


To calculate ROI, the net profit or loss from an investment is divided by the cost of the investment and multiplied by 100 to get a percentage value. For example, if an investment costs $10,000 and generates a net profit of $2,000, the ROI would be 20% (($2,000/$10,000) x 100).


ROI is used in a variety of industries and is an important tool for evaluating the success of marketing campaigns, capital expenditures, and other investments.

Overall, ROI is a critical concept in finance and helps investors and businesses make informed decisions about their investments.

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