Rate Of Return, abbreviated as ROR, is an useful concept used to arrive at the financial viability of a project. If ROR is less than the inflation or the Bank Rate then the project will be rejected. As the project will not be giving any value addition
It is the gain or loss on an investment over a specified period, expressed as a percentage increase over the initial investment cost. Gains on investments are considered to be any income received from the security plus realized capital gains.
A rate of return measurement can be used to measure virtually any investment vehicle, from real estate to bonds and stocks to fine art, provided the asset is purchased at one point in time and then produces cash flow at some time in the future. Financial securities are commonly judged based on their past rates of return, which can be compared against assets of the same type to determine which investments are the most attractive.