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If you invest $1,000 in a marketing campaign and it generates $1,500 in sales profit, your ROI would be: Key Reasons to Use ROI

– Useful for property investors.

Standard ROI doesn't account for the duration of the investment. A 50% ROI over one year is much better than a 50% ROI over five years.

It helps management decide whether to proceed with a project or discontinue an underperforming one. Limitations of ROI While useful, ROI has specific drawbacks:

It allows you to compare the performance of different projects or assets (e.g., comparing a real estate investment vs. a stock portfolio).