How this calculation works
Net benefit = total benefits − original investment − additional costs. ROI = net benefit ÷ original investment × 100. No time-value adjustment is made.
A worked example
R50 000 invested, R70 000 benefits and R5 000 additional costs gives R15 000 net benefit and 30% ROI.
Assumptions & limitations
- ROI is not an annualised return. Use benefits and costs from the same defined project and avoid counting the same expense twice. Tax, risk and the timing of cash flows are not modelled.
