Return on investment = 1/ dynamic payback period × 100%
Dynamic payback period = (t-1) +| (cumulative net present value of t-1year) |/net present value of t year.
T= number of years in which the present value first appears positive.
Investment return rate, also known as investment profit rate, refers to the ratio of the total annual net income of an investment scheme to the total investment of the scheme in a normal year after reaching the designed production capacity. It is a static index to evaluate the profitability of an investment scheme, and represents the annual net income created by unit investment in the normal production year of the investment scheme. For the scheme whose annual net income changes greatly during the operation period, the proportion of average annual net income to total investment can be calculated.
According to the different analysis purposes, the application indicators of return on investment can be divided into: 1, total return on investment (ROI); 2. Net profit rate of capital.
reference data
Return on investment Baidu Encyclopedia