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dc.contributor.authorBornholt, Graham
dc.date.accessioned2017-05-29T12:32:01Z
dc.date.available2017-05-29T12:32:01Z
dc.date.issued2017
dc.identifier.issn0001-3072
dc.identifier.doi10.1111/abac.12093
dc.identifier.urihttp://hdl.handle.net/10072/336700
dc.description.abstractHow to measure a project's implied rate of return has long been an unresolved problem, except for some special cases. This paper derives return on present cost (ROPC) as the correct measure of an investment project's implied rate of return. The IRR is a biased measure except for projects classified as simple projects, and this bias is likely to be substantial in many real-world applications. Thus while net present values should be used to determine whether to accept/reject projects, I recommend that analysts use ROPC in place of the IRR as a measure of a project's true rate of return.
dc.description.peerreviewedYes
dc.languageEnglish
dc.publisherWiley-Blackwell Publishing
dc.relation.ispartofpagefrom1
dc.relation.ispartofpageto14
dc.relation.ispartofjournalAbacus
dc.subject.fieldofresearchInvestment and Risk Management
dc.subject.fieldofresearchAccounting, Auditing and Accountability
dc.subject.fieldofresearchcode150205
dc.subject.fieldofresearchcode1501
dc.titleWhat is an Investment Project's Implied Rate of Return?
dc.typeJournal article
dc.type.descriptionC1 - Articles
dc.type.codeC - Journal Articles
gro.facultyGriffith Business School, Department of Accounting, Finance and Economics
gro.hasfulltextNo Full Text
gro.griffith.authorBornholt, Graham N.


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