The first thing to ask is, what is return on capital when looking at a project? And it can be summed up as the annual dollar return for every dollar invested or pound or yen or euro. So we want to look at what goes in, the amounts invested, and what comes out. So how is it calculated? Well, our formula is the return divided by your cost of investment, Whatever return you're earning from your project or your departmental division, you want to divide that by the cost that went into investing in that project, department or division. Why is it important? Well, first of all, it helps us to quantify project value. It gives us an absolute figure. When we look at certain projects such as efficiency or cost savings, we might want to ask, well, how much? How is this going to effect our profit? How is it going to effect our revenue growth? And it helps turn the subjective into objective. It also aids with decision making. Stakeholders need to be convinced of certain projects, maybe employees, suppliers, investors. By giving an absolute figure it becomes an extra data point, which can aid our decision. Lastly, it aids comparison. If we have various different projects, various different divisions, we now have a common way to compare them. And as resources are limited, maybe we have limited time, employees, money, this helps us to rank projects and decide which ones to go ahead with.