return on investment

high perceived value and low perceived risk/complexity

projects like these are rare jewels (ex. personal development)

low perceived value and low perceived risk/complexity

questionable projects, tend to comprise a large % of IT portfolios

the weighted average cost of capital

the true total cost of an investment

a positive ROI

where B > C

rate of return

(total benefits - total costs) / total investment

return on investment (ROI)

a technique to calculate the relationship between benefits and cost

opportunity cost

foregone investment income or interest; foregone revenue from other procedures if investments were made differently

high perceived value and high perceived risk/complexity

good investment, but needs detailed project management (ex. new drugs/vaccines)