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What is Rate of Return Analysis Methods about?
The document discusses the rate of return (ROR) method for comparing investment alternatives. It explains that the ROR is calculated using net present worth or equivalent uniform annual worth methods, and interpolation may be used to solve for unknown interest rates. The ROR is compared to the minimum attractive rate of return (MARR) to determine if a project is worth investing in based on its risk level and projected returns. Higher risk projects require a higher ROR to compensate for the additional risk.
- Author
- mohammedalnahmi
- Language
- EN