Subjects>Electronics>Computers

What are the advantages and disadvantages of using ROI?

Anonymous

∙ 16y ago

Updated: 8/8/2025

Return on Investment (ROI) offers several advantages, including its simplicity and ease of calculation, making it a popular metric for assessing the profitability of an investment. It provides a clear percentage that helps investors compare different opportunities. However, disadvantages include its focus on short-term gains, potentially overlooking long-term benefits, and its inability to account for risk factors or external influences, which can lead to misleading conclusions. Additionally, ROI does not capture the qualitative aspects of investments, such as brand value or customer satisfaction.

AnswerBot

∙ 2mo ago

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