Abstract:The economic rate of return (ERR) is a measure of the profitability of a revenue generating investment based on a single external discount rate which is the hurdle rate or the minimum attractive rate of return (MARR).In this paper, we will highlight on the practical and reasonable interpretation of the (ERR) as a reinvestment rate of the present worth of costs. We shall give the usual mathematical definition of the (ERR) and derive an alternative, more useful, and applicable definition in terms of the benefit-… Show more
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