Lesson 10: Calculating the Sustainability Return on Investment Flashcards
(5 cards)
1
Q
Why is estimating costs and benefits essential before calculating ROI?
A
It helps build realistic projections and makes it easier to compare your preferred option with alternatives
2
Q
What is the classic formula for ROI?
A
ROI = (Total Benefits - Total Costs) / Total Costs
3
Q
What dynamic ROI techniques are often used?
A
Payback period, NPV, internal rate of return and breakeven analysis
4
Q
What types of risks should be considered in a business case?
A
Strategic, operational, financial, legal, and reputational risks
5
Q
What is a gut-check when accounting for risks?
A
Informal validation by team members or experts to ensure projections are reasonable and not overly optimistic
