Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Why is it crucial to estimate the MARR correctly?
Expert Solution
Step 1
It is the minimum return rate on the project which an entity computes prior to the staring of the project.
It crucial because it helps in making a decision regarding the project. It helps in deciding whether the project needs to be accepted or declined on the base of the feasibility of the project which is determined on the MARR basis.
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