Time value of money

“A dollar today is worth more than a dollar tomorrow.” You may have heard this phrase few times before and there is a reason for that: time value of money needs to be considered in every financial analysis that covers more than one time period. This is also the first basic principle of finance. So, [...]

The funny thing about ROI

Is return on investment (ROI) of 5 a good one?

Are you coming across questions like these? I do too and I’m usually puzzled since this question is loaded with so many assumptions. Let’s identify these assumptions before answering this question.

First, it needs to be clarified what “R” and “I” stand for. ROI is a relative [...]