November 30, 2011

Rate-of-Return Calculations

Engineering Economics Revision Article Series

Internal rate of return (IRR) of an engineering decision can be compared with the minimum acceptable rate of return set by the organization.

IRR is calculated by equating the annual, or present, or future worth of cash flows to zero and solving for the interest rate that allows the equality


Engineering Economics, 4th Edition, James L. Riggs, David D. Bedworth, and Sabah U. Randhawa, McGraw Hill, New York, 1996

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Originally posted in 252

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