Return on investment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 April 2012 hi,

at the time of investment, when only initial outflow is confirmed and there is rough idea of annual expenses but NO idea of return, how can ROI be computed?

e.g. Initial outflow : 15 lacs

expenses = approx 80000 pm

inflow = not known (could be known only after commencing business)

compute the Expected ROI.

CA Ankit Gulgulia (Jain)

CA Ankit Gulgulia (Jain) (Expert)
Follow

21 April 2012 When u say Expected ROI , The Inflows would always be expected. Therefore , its computation requires pre estimation of Expenses and Inflows.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
Follow

21 April 2012 The return on investment ratio is one of several financial ratios used to evaluate investment alternatives. An ROI analysis compares the magnitude and timing of cash inflows and cash outflows. The inflows compare favorably to the outflows in high-ROI projects, meaning the project costs are recovered faster.