Return on Investment (ROI)

In finance, the Return on Investment (ROI) is an estimated measure of the profitability of an investment by measuring the amount of return on the given investment relative to the investment’s cost.

This is typically calculated by dividing the investment’s return by its cost, hence producing a ratio.

\[ ROI = \frac{V-C}{C}, \]

where \(V\) is the investment’s current value, and \(C\) is the investment’s cost.

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