Minimum Attractive Rate of Return (MARR)
Generally speaking, it wouldn't be smart to invest in an activity with an IRR of 8% when there's another activity that's known to return 16%. An organization's minimum attractive rate of return (MARR) is just that, the lowest internal rate of return the organization would consider to be a good investment. The MARR is a statement that an organization is confident it can achieve at least that rate of return.
Another way of looking at the MARR is that it represents the organization's opportunity cost for investments. By choosing to invest in some activity, the organization is explicitly deciding to not invest that same money somewhere else. If the organization is already confident it can get some known rate ...
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