Investor’s rate of return

Equation (9-54) may be solved for i either graphically or by an iterative trial-and-error procedure. The value of i given by Eq. (9-54) is known as the discounted-cash-flow rate of return (DCFRR). It is also known as the profitability index, true rate of return, investor s rate of return, and interest rate of return. 

Using a 260/wafer sales price for epitaxial silicon wafers and the United States MACRS tax-basis depreciation schedule, the investor s rate of return (IRR) is 18.3%. In addition, the return on investment (ROI) is 25.3%. These measures increase significantly with small changes in sales price for example, at 273/wafer, the IRR is 29.9%. Note that the economic analysis is somewhat shielded from variations in the price of epitaxial wafers because it is strongly linked to the price of the incoming polished wafers. In other words, the key metric of interest is the value added to the wafer by the epitaxial film deposition. 

For epitaxial silicon wafers, product design focuses on optimizing the geometry of the plasma-enhanced, chemical-vapor-deposition (PECVD) reactor. To increase productivity, and maintain acceptable thickness uniformity, on the order of 5%, a simple optimization strategy locates a design that completes the deposition in 62 s. Then, for a standard manufacturing process, the economics are driven by the wafer costs, which are provided by a vendor at 206/wafer. At a sales price of 260/epitaxial wafer, the investor s rate of return is 18.3% and the return on investment is 25.3%. 

See also Rate of return on investments) Investor s rate of return, 301n. 

The discounted cash flow rate of return is known by other terms, for example, the profitability index, the true rate of return, the investor s rate of return, and the internal rate of return. It is defined as the discount rate, i, which makes the NPV of a project equal to zero. This can be expressed mathematically by... 

Other similar methods or names are Profitability Index, Interest Rate of Return, True Rate of Return, Investor s Rate of Return... 

The two principal profitability measures that involve the time-value-of-money in terms of discounted cash flows are the net present value or worth (NPV) and the investor s rate of return (IRR), which is also referred to as the discounted cash flow rate of return (DCFRR). These measures are anomalous in that, when used to compare alternative processes, they often give different results. This has led to substantial disagreement within the finance community (Brealey and Myers, 1984). 

Check the values given for the investor s rate of return and net present worth. If the company requires a minimum rate of return of 10%, which system should be chosen ... 

Should the lease-and-flood arrangement be accepted How should this proposal be presented to the company board of directors who understand and make it a policy to evaluate by the investor s rate of return ... 

You can display the economics of your process by graphing the investor s rate of return (IRR) as a function of the cost of the feed divided by the sales price of the gas. 

The Investor s Rate of Return (IRR) for this Project is 27.86% The Net Present Value (NPV) at 15% for this Project is 2,888,500 ROI Analysis (Third Production Year)... 

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