What is ROI - Return on Investment?

The video tutorial explains the concept of Return on Investment (ROI), a key measure in project management and finance. It details how ROI is calculated as the ratio of net income to total cost, typically expressed as a percentage. A positive ROI indicates a profitable investment, while a negative ROI suggests a loss. The tutorial also highlights the limitations of ROI, such as its inability to account for the timing of costs and benefits, and introduces the discounted cash flow method as an alternative. Despite its limitations, ROI is presented as a simple and effective measure for evaluating smaller projects.

Discuss one limitation of using ROI as a measure of investment success.

What alternative methodology can be used instead of ROI for evaluating investments?