Tuesday, July 15, 2008

ROI Method

The Mob Wars Calculator deploys a simplistic ROI method to offer the Next Best Buy recommendation.

The Return-On-Investment (ROI) formula is the Income of the Establishment against the Actual Next Price of the Establishment. With this the Indicator will offer the Next Establishment on a comparison basis across all Establishments (only). Undeveloped Lands are NOT

The Actual Next Price includes the lowest cost of the Undeveloped Land with the Establishment price. You may realize certain inaccuracies with this formula if you have been stocking up a lot of Undeveloped Lands. But strategies in a different post.

Undeveloped Lands are NOT included in the Next Best Buy evaluation. This is intentional. See the Land Banking post.

You will notice that the ROI to buy 1 Villa is the same to buy 10 Villas. Your decision point is affordability versus Time To Own (TTO, from the Analysis tab). When you can, always strive to buy 10 in bulk. When you buy 10 in bulk, 9 are actually discounted because they are priced at the lowest Actual Next Price. You can experiment with the numbers on the spreadsheet to understand what I mean.

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