Return on Investment
Return on investment (ROI) is calculated by subtracting the project
costs from the benefits and then dividing by the costs
ROI = (total discounted benefits - total discounted costs) / discounted costs
The higher the ROI, the better
Many organizations have a required rate of return or minimum
acceptable rate of return on investment for projects
Internal rate of return (IRR) can by calculated by finding the discount
rate that makes the NPV equal to zero