I was going through some document for work, and I saw a phrase "a ROI of less than 2 years." Obviously, I get that it's saying that in 2 years you break even with your initial investment cost. But isn't ROI measured in percentage? Investopedia shows ROI formula as well, and I was just wondering if it is a common practice to use the term ROI interchangeably. Thanks!
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ROI is a fairly mainstream term nowadays, so it is used in a broader scope than it was originally intended. So, you'll see a textbook formula that reflects the original use, but you'll run into bastardized forms like you discovered. It's not wrong, it's just being used differently than the textbook formula. Conceptually you can talk about a return on investment in terms of real dollars, in terms of a % increase / decrease, in terms of time to break even, etc. Really, anything you can dream up that fits under the conceptual umbrella of a return on investment.
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