What is ROI, ROI Return on Investment Formula

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ROI is the return on investment. It is a measure of how much money a company earns on an investment. It is calculated by taking the net profit, subtracting all costs, and dividing it by the total investment. In order to calculate ROI, we need to consider three factors: cash flow, cost of capital and time. The formula for ROI can be written as: ROI = Net Profit ÷ (Cost of Capital x Time)
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