Return on Investment (ROI)

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Return on Investment (ROI) is a ratio or percentage value used to measure the profitability of an asset. A positive ROI value means the asset is making profits while a negative ROI reflects a loss. ROI is one of the basic measurement tools to evaluate the success of an investment.

The formula for measuring ROI is simple:

ROI = (Present Value of Investment ‚Äď Initial Value of Investment) / Initial Value of Investment

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