Another year is drawing to a close.
And our wedding photos are up on the internet for those that want to see them!
You can view them by clicking here
Wednesday, December 27, 2006
ROI Calculation
Saw an interesting video presentation on BNET (www.bnet.com) named “Calculating ROI”.
What is ROI?
It is an analysis tool to compare the expected benefits of a project against the costs.
Its purpose is to help calculate if / when a project will turn £ into £££.
To reliably use ROI you need to have certainty in both the costs involved and the benefits to be achieved.
The simple ROI calculation can be expressed as:
ROI = return / investment
An interesting point raised in the presentation was that of remembering to include Cost of Capital (http://en.wikipedia.org/wiki/Cost_of_capital) in the calculation.
So for example if the return is estimated at £250,000 over 3 years the actual return after factoring in Cost of Capital could actually be £215,000.
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