Business case guide FAQ > Business case finance > Return on investment calculation and ROI calculators
Search the glossary for business case terms often ill-defined, confused, or prone to misinformation:
The typical method is benefits divided by costs, usually, over a three-year period. This is a reasonable back-of-the-envelope calculation, but dangerous for a serious investment decision. Reasons:
- Cash flows undiscounted, so, no accounting for time and risk
- No charge for capital. Capital always want a return.
- Understates economic life of most technologies. It's more than 3 years.




