ReliaSoft’s Reliability ROI: Difference between revisions
No edit summary |
No edit summary |
||
| Line 4: | Line 4: | ||
First, traditinal Return On Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. In general to calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; and the result is expressed as a percentage or a ratio. | First, traditinal Return On Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. In general to calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; and the result is expressed as a percentage or a ratio. | ||
<math>ROI={ | <math>\[ROI=\frac{Gain-Cost}{Cost}\]math> | ||
The return on investment formula: | The return on investment formula: | ||
Revision as of 18:08, 1 March 2011
R3OI
ReliaSoft's Reliability Return on Investment(RRROI or R3OI)metric was
First, traditinal Return On Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. In general to calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; and the result is expressed as a percentage or a ratio.
<math>\[ROI=\frac{Gain-Cost}{Cost}\]math>
The return on investment formula:
In the above formula "gains from investment", refers to the proceeds obtained from selling the investment of interest. Return on investment is a very popular metric because of its versatility and simplicity. That is, if an investment does not have a positive ROI, or if there are other opportunities with a higher ROI, then the investment should be not be undertaken.