Reference no: EM131880513

Phase 1 :-The short paper assignment should focus on an overview of the Return on Investment topic and a review of its historical roots and how first utilized with the DuPont Company. Return on Investment (ROI) is used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. For our purposes, the formula is as follows: ROI = (Gain from Investment – Cost of Investment) Cost of Investment The “return” is the potential benefit that can be derived through an investment. The “expense/cost” is the risk taken to pursue said investment e.g. cash outlay. The ROI result can be expressed as a percentage or as a ratio and can therefore provide a snapshot of profitability. In other words, a positive ROI would indicate that an investment would be viable and the inverse is true by a negative ROI. Furthermore, the higher the percentage, the greater return potential on the initial investment. While the ROI is most commonly discussed in the context of business, the return on investment strategy can be applied outside of terms related to financial reward. Any entity attempting to evaluate the impact a particular course of action may have on its stakeholders can greatly benefit from exposure to this performance metric. In addition, consider both “Hard” and “Soft” analysis identifying how they would be utilized by type of project.