New method accurately compares project profitability without discounting.
The article introduces a new way to measure the profitability of investment projects called Aggregate Return On Investment (AROI). AROI is a simple ratio of cash flow to invested capital that accurately shows how much wealth a project creates. It helps compare different projects by considering their risks and returns, without needing complex discounting calculations. AROI is easy to calculate and provides a clear picture of a project's efficiency. It is a useful tool for making smart investment decisions and can be used alongside traditional methods like Net Present Value.