posted 2½years ago by pin
© Copyright: Oliver F. Lehmann PMP Self Test, oliverlehmann.com
Cost Management | Return On Investment
Which is not true in regard of RoI (Return on Investment) for a project?
A. It defines the cumulated net income from an investment at a given point in time or during a defined period.
B. It includes investment, direct and indirect costs and may include allowances for capital cost, depreciation, risk of loss, and/or inflation.
C. It is most commonly stated as a percentage of the investment or as a dimensionless index figure.
D. It is the time when cumulated net income is equal to the investment.
george (2¼years ago):
I think it's D. ROI is not "time", it's percentage or money, which we get back from the project in return to our initial investments.
ROI could be 40%, for example. And this will mean that if we invested $100, the NPV of what we get back is $140 (including our initial $100).
Or ROI could be $140, which will mean that NPV of what we get back equals to $140.
ROI is NOT profit, it's the total amount of money we get back, as answer B says.
(c) 2009-2012 thePMP.com, rev.346, 0.24sec
PMP® and PMBOK® are registered trademarks of Project Management Institute, Inc.