The ROI is the Return on Investment. It is a term used in business to measure the profitability of a project or venture. Business projects often only make a return on the investment after many years. The ROI is often calculated from the present values of the total outgoing expenses and the total incoming revenues and then annualized to give an annual ROI. If the annual ROI does not exceed the company’s cost of capital then the project was – let’s just say – not a good idea.

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