minimum acceptable rate of return

Definition

Indicates the minimum rate of return that a project manager considers acceptable before initiating a project. Managers apply this concept across a wide variety of projects to determine if the benefits or risks of one project exceed another possible project. A project manager is more likely to start a new project if the MARR exceeds the current level of other projects. Some managers accomplish this by applying the discounted cash flow method to the project.

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I wanted to know the minimum acceptable rate of return and I thought it was a really cool thing to do.

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Before they ok'd the project, they had to identify what their minimum acceptable rate of return would be on it.

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John rejected that project because he thought the minimum acceptable rate of return (MARR) was too low and the risks were too great.

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cutoff point incremental internal rate of return