This paper deals with capital budgeting decisions under uncertainty. We present an Aggregate Return On Investment (AROI …), obtained as the ratio of total (undiscounted) cash flow to total invested capital and show that it is a genuine rate of return … ranks any bundle of different-risk competing projects. Relations with other criteria such as Modified Internal Rate of …

The recent notion of Average Internal Rate of Return (AIRR) [Magni 2010, The Engineering Economist, 55(2), 150 …-180] completely solves the long-standing problem of the internal rate of return (IRR). While the AIRR is a return measure, this paper … depend on the market rate, and is a return measure, for it is a mean of one-period return rates, weighed by the outstanding …

) connections existing between economic measures and accounting measures. In particular, the average accounting rate of return is … average accounting rate generates a decision rule which is logically equivalent to the NPV rule for both accept …/reject decisions and project ranking. The paper also shows that maximization of the simple arithmetic mean of residual incomes is …

discount rate is the cost of capital. The latter is the expected rate of return of an equivalent-risk alternative that the …