What does return on investment (ROI) measure?

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Return on Investment (ROI) is a financial metric used to assess the efficiency of an investment relative to its cost. By calculating ROI, investors and businesses can determine how much profit or gain an investment has generated in comparison to what was initially invested. This metric is instrumental for decision-making as it allows stakeholders to evaluate the profitability of different investments or projects and allocate resources more effectively.

In contrast, the other options focus on unrelated aspects of business performance. For instance, measuring the quantity of output produced pertains more to operational efficiency or productivity rather than financial returns. Total sales revenue indicates a company's top line performance but does not reflect the profitability or efficiency of those sales in relation to investment costs. Similarly, overall market share provides insights into a company’s competitive position in the market, but it does not indicate how well investments are generating returns. Thus, the focus of ROI on investment efficiency makes it the correct answer in this context.

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