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Return on Software: Maximizing the Return on Your Software Investment
book

Return on Software: Maximizing the Return on Your Software Investment

by Steve Tockey
August 2004
Intermediate to advanced
656 pages
15h 28m
English
Addison-Wesley Professional
Content preview from Return on Software: Maximizing the Return on Your Software Investment

Rank on Rate of Return

In the rank on rate of return approach, the IRR is calculated for each individual proposal. The proposals are then ranked in order of decreasing IRR. All proposals with an IRR greater than the MARR are selected. This is a fairly well-known approach, but it has two important weaknesses. First, ranking on the IRR will be guaranteed only to select the set of proposals that maximize the total present worth if all the proposals are independent and there are no resource limitations (e.g., budget constraints). Second, even when you are comparing mutually exclusive alternatives, the alternative with the highest rate of return on its total cash flow may not be the alternative that will maximize the total present worth at the MARR. ...

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Publisher Resources

ISBN: 0321228758Purchase book