Ray Martin -
on the blinking
star to go to the document indicated.
Internal Rate of Return Revisited - Internal
Rate of Return (IRR) and Net Present Value (NPV) are complementary measures of Discounted
Cash Flow (DCF). They have essentially equivalent utility. The Relevant IRR (RIRR)
is not inferior to NPV. IRR is Okay!
Download the original Internal
Rate of Return Revisited from the Social Science Research Network (SSRN)
Electronic Library. It is in Portable Document Format (PDF). The sample files are not
linked from this version.
Download a reader from Adobe.
Download the sample files
for use with either the Hypertext or PDF versions above.
This PDF version of Internal
Rate of Return Revisited includes links to sample files. It requires Adobe
Acrobat version 3.0x or higher for the bookmarks and links to work. You must also be
online in order for the links to work.
Internal Rate of Return Revisited: Economic Analysis links Economic Analysis (EA),
Cost-Benefit Analysis (CBA) to the relevant section of the Presidential/Congressional
Commission on Risk Assessment and Risk Management Final Report, Volume 1,
1977. Problems identified by the Commission would be mitigated if not resolved by
simply using both measures of Discounted Cash Flow rather than only one. These
papers are on the RiskWorld server.
A Buy-Lease sample
problem illustrates the relationship between Discounted Cash Flow (DCF) in a public sector
Cost-Benefit Analysis (CBA) with no revenue stream and an identical problem in the private
Review. Questions (actually polite challenges) to my IRR is Okay
thesis have been posed the most times in the context of the Principles of
Corporate Finance textbook by Richard A. Brealey and Stewart C. Myers,
commonly called "Brealey and Myers (B&M)." The original IRR Revisited working
paper addressed a composite of IRR criticisms from various sources, of which B&M was
only one. This paper focuses on the points of disagreement with B&M: IRR
treatment and separation of risk and return only.
Go to an abstract of the
closest position I have found to the IRR is Okay
thesis presented here. It was done by Professor Richard H. Bernhard, North Carolina
Rate of Return in the Department of Defense (IRR in DoD) illustrates how IRR could be
used in a DoD sample analysis (Corporate Information Management Functional Economic
Analysis (CIM FEA)). (These are overhead slides only requiring familiarity with the
topic in order to use them effectively.)
Click on proposal to go to my submission to NSF. It is in PDF, as submitted
online via NSF Fastlane.
Click on reviews to go to the NSF/EPA rejection letter and reviews, also in
Click on review of the
reviews for a breakout of the points made in the NSF/EPA reviews. They
are essentially the same ones made in the informal peer review. My responses are
paraphrased, but all are taken from the proposal. No new information is added.
- Click on Why
NPV is Good for and example of the disagreement and links to a summary of the
mainstream view addressed in the proposal, reviews to the proposal, and the informal peer
review linked above.
All inputs are appreciated, especially from previous reviewers. I would be
pleased to put all received online here with your permission. None excluded.
No changes. Warts and all.
Team Management is a table that indicates the characteristics and different incentives
in a hierarchical organizational structure versus a flat one.
Related Topics, Links
and Notes is a catch-all page for information not covered in other papers.
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need additional information--for any reason.
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