Define 'ROI' and give a simple formula.

• A. Revenue on Investment; ROI = revenue / cost.
• B. Return on Income; ROI = net benefit / cost.
• C. Return on Investment; ROI = (net benefit − cost) / cost × 100%.
• D. Ratio of Input; ROI = cost / net benefit.

Answer: (C)

ROI (Return on Investment) shows how profitable an investment is by comparing the gain you get to the amount you spent. The standard formula is ROI = (net benefit − cost) / cost × 100%, where net benefit is the total gain from the investment after subtracting the cost. For example, if you invest 1,000 and earn a total of 1,200, the net benefit is 200, so ROI = 200 / 1,000 × 100% = 20%. This framing highlights the percentage return per unit of money invested, not just revenue or other measures.