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ROI (Return on Investment)
Definition
A measure of the return generated from an investment relative to its cost, used to evaluate the efficiency and profitability of spending.
How It's Calculated
(Revenue or profit generated − Investment cost) ÷ Investment cost
Example
A marketing campaign costs $20,000 and generates $60,000 in revenue, resulting in an ROI of 2.0, meaning $2 gained for every $1 invested.
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