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