Accepting a project based on RI

If the RI is positive then it's accepted or if its negative then it wnt b accepted

Farzana: Please do not answer in the Ask the Tutor Forum Vicki: Farzana is correct in that if the RI is positive them we accept. It is because the investment of 200,000 is earning 30,000, which is more than the interest cost of 200,000 x 12% = 24,000. RI is simply checking whether or not the investment is earning more than the cost of money of (in this case) 12%. If it is earning more then the RI will be positive and we accept; if it is earning less then the RI will be negative and we reject.

You are welcome :-)

I would like to ask, if the ROI and RI compare which one is better? Why? Thank you.

It is not a question of one being better - there is no 'best' one. It depends what we are doing with it. If you watch the lecture I explain this and talk about the advantages and disadvantages.

John thank you so much for your help . I have passed the exam today got 60% . Without ur help it was impossible to pass. U r really a great lecturer. Ur suggestion is just enough to get good marks n understandable.

That's great Farzana, and many congratulations :-)