What are the four algorithms for return on investment?

Four algorithms of return on investment;

1, rental rate of return method formula.

Return on investment = (monthly rent after tax-monthly mortgage repayment) × 12/ (down payment+mortgage repayment of forward house).

2, yield analysis formula.

Return on investment = (monthly after-tax rent-monthly property management fee) × 12/ total house price.

3. Internal rate of return formula.

Return on investment = accumulated total income/accumulated total investment = monthly rent × accumulated rent months during the investment period/(mortgage down payment+insurance premium+deed tax+overhaul fund+other investments such as furniture+accumulated mortgage payment+accumulated property management fee).

4. Simple evaluation formula.

Return on investment = annual income of real estate × 15 = purchase price of real estate.

Return on investment is the economic return on investment. It is an index to measure the operating effect of an enterprise.

Return on investment = annual profit or average annual profit/total investment × 100%.

Introduction of return on investment:

Return on investment (ROI) refers to the percentage of perennial profit or average annual profit to the total investment in the production period. Its calculation formula is: return on investment (ROI)= annual profit or average annual profit/total investment × 100%.

The advantage of return on investment is simple calculation; The disadvantage is that the time value of funds is not considered, which can not correctly reflect the influence of the length of construction period, different investment methods and recycling on the project. The numerator denominator calculation caliber is not comparable, so the net cash flow information cannot be directly used. Only investment projects with investment profit rate index greater than or equal to risk-free investment profit rate are financially feasible.