CIM FEA Example

• NPV used for DoD (Department of Defense) CIM (Corporate Information Management) decision making

• IRR is not used in DoD

• CIM FEA is the most difficult case for IRR, still the solution is straightforward:

  • Use differential cash flows
  • IRR avoids the argument over the "correct" discount rate
  • IRR especially useful for ranking defense alternatives
  • Makes multiple project, joint service, commercial, historical DoD, and worldwide comparisons practical

Copyright © 1991-1997, Ray Martin

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