Harvard Business Review Guides Ultimate Boxed Set (16 Books)
by Harvard Business Review, Nancy Duarte, Bryan A. Garner, Mary Shapiro, Jeff Weiss
Chapter 10
Calculate ROI
Return on investment (ROI) is a more pointed look at the financial value of your proposal. Think of it as a measure of relative “goodness” because it helps organizations compare projects and decide which ones to pursue.
Good news for mathphobes: It takes nanoseconds to calculate ROI in a spreadsheet (Excel saves you from doing fifth-order partial differential equations by hand). Many companies have templates, like the one in figure 10-1, where you just plug in your numbers and the software does the rest.
Here’s the classic formula for ROI:
ROI = Net Benefit/Total Cost
(Net benefit is the total benefit minus the total cost.)
A positive ROI is good. A negative one means the project’s not worth doing. The larger the ROI ...
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