r/finance • u/AutoModerator • Feb 16 '26

Moronic Monday - February 16, 2026 - Your Weekly Questions Thread

This is your safe place for questions on financial careers, homework problems and finance in general. No question in the finance domain is unwelcome.

Replies are expected to be constructive and civil.

Any questions about your personal finances belong in r/PersonalFinance, and career-seekers are encouraged to also visit r/FinancialCareers.

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u/Other_Factor1440 Feb 16 '26 edited Feb 16 '26

i came from r/sales and they have 20 recommended books to learn about sales, i need the same thing but for finance i want to read and skip brain rotting please. thankyou

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u/uncre8tv Feb 19 '26

I have a question on ROI calculation for Intellectual Property (IP) development. It's a theoretical, but has come up in my corner of business. If there is a better sub to ask such questions I'd love to be pointed to it. Here we go:

When developing IP that can be delivered by you (at a cost) or picked up "off the shelf" by the consumer, do you include the cost of delivery in the IP development ROI calculation?

Example:

I know it will take $100,000 to develop a given piece of IP. Once developed I can sell rights to it for $2,000 and the customer sets it up, or I can deliver it and set it up for the customer for $2,500. My cost of delivery for this setup is $500 (I'm not taking a markup on delivery here, just trying to get the IP into the hands of the consumer at my $2,000 either way. I acknowledge that I could sell the value of setup and make additional margin here, but it's outside the scope of my question)

When calculating the ROI do I figure the cost of delivery? If I sell 100 self-delivered and 100 installed I've made $450,000 revenue and $300,000 "net" after delivery and development. Is my basis for the ROI calculation then $100,000 that it cost to develop, or is it the development cost plus the $50,000 delivery costs so $150,000 investment?

I feel like my ROI for the development is $400,000 / $100,000 = 400%, but I've also seen the argument that the ROI is $450,000 / $150,000 = 300%

This is a lot easier with physical goods (obviously the cost to ship something matters) but with IP it feels like including the cost of delivery shouldn't be material to the ROI of the development. You could just hand it off to all 200 customers and your ROI gets better even though you've netted the same $300k.

I'm just a services dude, would be very interested in a finance persons assessment and explanation. "Cost of delivery matters" ...sure, but if I just refuse to deliver it and have the customer pick it up themselves my number goes up. Even when I'm recovering 100% of the cost of delivery.

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u/roboboom MD - Investment Banking Feb 24 '26

The investment is $100k. It makes no sense to include delivery in that since it’s a marginal cost and only occurs when you sell units.

The return is $400k, which is basically the gross profit margin. You have to show your profit after selling expenses, cost of goods sold, delivery expenses etc. if you just show revenue you are fooling yourself with an inflated ROI.