Return rates

Option Investment Sale Return Rate of return... 

Net Return Rate. The NPV can be divided by the DTC to give a measure analogous to the net return on investment over the life of the venture. If this is divided by the venture life, the result is the annual net return on investment, called the net return rate (NRR) defined as (24) ... 

More exactly, this third profitabiUty parameter is an average discounted annual net return rate on the total investment and corresponds to the net return rate of the example. It is a discounted annual rate of profit criterion that relates to the NPV as a discounted profit criterion. 

Risk and uncertainty associated with each venture should translate, ia theory, iato a minimum acceptable net return rate for that venture. Whereas this translation is often accompHshed implicitly by an experienced manager, any formal procedure suffers from the lack of an equation relating the NRR to risk, as well as the lack of suitable risk data. A weaker alternative is the selection of a minimum acceptable net return rate averaged for a class of proposed ventures. The needed database, from a collection of previous process ventures, consists of NPV, iavestment, venture life, inflation, process novelty, decision (acceptance or rejection), and result data. 

This gives two choices ia interpreting calculated NRR values, ie, a direct comparison of NRR values for different options or a comparison of the NRR value of each option with a previously defined NRR cutoff level for acceptabiUty. The NPV, DTC, and NRR can be iaterpreted as discounted measures of the return, iavestment, and return rate, analogous to the parameters of the earher example. These three parameters characterize a venture over its entire life. Additional parameters can be developed to characterize the cash flow pattern duting the early venture years. Eor example, the net payout time (NPT) is the number of operating years for the cumulative discounted cash flow to sum to zero. This characterizes the early cash flow pattern it can be viewed as a discounted measure of the expected operating time that the investment is at risk. 

Internal Return Rate. Another rate criterion, the internal return rate (IRR) or discounted cash flow rate of return (DCERR), is a popular ranking criterion for profitabiUty. The IRR is the annual discounting rate that makes the algebraic sum of the discounted annual cash flows equal to zero or, more simply, it is the total return rate at the poiat of vanishing profitabiUty. This is determined iteratively. 

The total annual return rate on investment is the sum of both the capital cost rate, ie, discount rate, and the net return rate (NRR). Any given numerical value can represent a low capital cost rate and a high net return rate, or a high capital cost rate and a low net return rate. The IRR, as the discounting rate that gives a vanishing net return, cannot be related to the total return rate at appropriate discount rates because of the nonlinear nature of the discounting step. 

Profitability Diag rams. Profitabihty diagrams of the type shown in Figure 3a for Venture A provide insight into venture profitabihty. Total return rate is defined as the sum of the discount rate and the net return rate (NRR). The discount rate, net return rate, and total return rate are all shown on the diagram as functions of the discount rate. Because the NPV is a nonlinear function of the discount rate, the NRR and total return rate are also nonlinear. The NRR, as a measure of the profitabihty, correctly decreases as the discount rate increases. 

Fig. 3. Profitabihty diagram for Venture A. (a) Simple diagram. NRR is net return rate IRR, the internal rate of return, is a given fixed point, (b) Three NRR cutoff lines for Venture A where B, C, and D represent NRR values of 15, 10, and 5%/yr, respectively. For example, at a discount rate of 10% per year, the NRR cutoff for Venture A could be as high as 10.74% per year for marginal acceptance (point X). Acceptable levels are to the left of NRR cutoff...

The internal return rate (IRR), a fixed point on the diagram, caimot be viewed as a measure of profitabihty, which should vary with the cost of capital (discount rate). Because the curvature of the total return curve caimot be predicted from the single IRR point, there is no way that the IRR can be correlated with profitabihty at meaningful discount rates. Even both end points, ie, the IRR and the total return at zero discount rate, are not enough to predict the curvature of the total return curve. 

Fig. 4. Effect of NPV on profitabihty where investment and lifetime are the same for all Ventures (see Table 4). (a) Sale revenues for Ventures B and C have been selected so that at a discount rate of 10% per year Ventures A, B, and C each have the same NPV and NRR. IRR values are as given and do not relate to NPV, NRR, or total return rate (TRR). The diagram indicates that at discount rates less than 10%, Venture C has the largest NRR, but the IRR indicates Venture B is the choice for all discount rates, (b) Sale revenues for Ventures D and E have been selected so that Ventures A, D, and E each have a different NPV at a discount rate of 10% per year, but all three have the same IRR. The diagram indicates that at the selected discount rate of 10%, the...

Fig. 5. Effect of lifetime on profitability. Venture F has a shorter operating lifetime than Venture A, but the same investment and IRR (see Table 4) the NPV is the same at the 10% discount rate. The diagram indicates that the profitabiUty of Venture F is higher than that of Venture A at all discount rates the shorter lifetime leads to a higher annual net return rate (NRR). The IRR rate does not indicate this difference in profitabiUty.

Equation (9-113) shows that Eq. (9-114) is only approximately true and should be used, if at all, solely for low interest rates. Let us consider the case of a nominal (DCFRR) of 5 percent and an inflation rate of 3 percent. Equation (9-14) yields an approximate effective return rate of 2 percent, compared with the real effective rate of 1.94 percent given by Eq. (9-113) i.e., there is an error of 3.1 percent. Now let us consider the case of a nominal (DCFRR) of 2.5 percent and an inflation rate of 23 percent. Equation (9-114) yields an approximate effective return rate of 2 percent, compared with 1.63 percent from Eq. (9-113) in this case, the error that results is 22.7 percent. 

Irradiation with UV light isomerized the azobenzene units from the trans to the cis form, while the reverse isomerization occurred thermally in the dark. The cis to trans conversion is catalyzed by both protons and hydroxyl ions. Hence, the catalyzed dark process for tethered azobenzene is greatly modified in comparison with that for free azobenzene. For the tethered azobenzene, beginning at pH 6, the cis to trans return rate sharply decreased with increasing pH up to 10, whereas the rate for free azobenzene rapidly increased in the same pH range owing to OH- catalysis. These observations can be explained by the electrostatic repulsion which lowers the local OH concentration on the polyion surface below that in the bulk aqueous phase. 

Fig. 3 Ground-state and excited-state energies in the planar and twisted configurations of a TICT molecule. Photon absorption usually elevates the molecule to the LE state in the planar configuration, where the angle of intramolecular rotation, cp0, is close to zero. From the LE state, the molecule can return to the ground state with a rate kf, or it undergoes intramolecular rotation with a rate ka. The twisted state is characterized by a larger intramolecular rotation angle

Internal return rate. The internal return rate (IRR), also known as the discounted cash flow return rate, is the iteratively calculated discounting rate that would make the sum of the annual cash flows, discounted to the present, equal to zero. As shown in Figure 2, the IRR for Project Chem-A is 38.3%/yr. 

Assume that the plant in which this equipment is installed will operate 10 years, that a tax rate of 34%/year is applicable, and that a charge of 10% of the capital cost per year for depreciation will be employed over the entire 10-year period, that fixed charges including maintenance incurred by installation of this equipment will amount to 10%/year of the investment, and that a minimum acceptable return rate on invested capital after taxes and depreciation is 15%. Determine which of the two alternative installations should be selected, if any. 

Discotic liquid-crystal phase, 13 371 Discotic liquid crystals, 15 96 Discotic mesogens, 20 79 Discounted cash flow return rate (DCFRR), 9 544-545... 

Internal reflection, 24 111-112 Beer s law expression for, 24 113 Internal resistance, batteries, 3 410 Internal return rate (IRR), 9 544-545 Internal sizing, in paper manufacture, 18 109-113... 

Net present value (NPV), 9 536—537, 546 Net return rate (NRR), 9 537, 544 Net weight, 26 246 Network copolymers, 7 610t Networked programmable logic controllers, 20 670-671... 

Overall heat-transfer coefficient, 13 244 Overall return rate (ORR), 9 545 Overbasing, 15 423 Overcladding, in optical fiber manufacturing, 11 144 Overcoat layers, in photography, 19 199 Overcuring, in tire compounding, 21 810 Overfeed/underfeed drums, 15 439-440 Overflow... 

Information collected to be forwarded to the research team for analysis. To ensure anonymity a unique identifier number to be allocated to each client. Returned needles/syringes to be counted and recorded by staff. A 100 per cent return rate should be aimed for, but it is recognised that this may not always be achievable. 

The adducts formed by attack of RO" at position 2 of 3,5-dinitropyridine are more stable than those formed at position 4. In DMSO-rich media the stability difference results from a markedly lower return rate for the former as compared with the latter (see data in Section II,B,7). The overall result is in agreement with the well established fact that the presence of a stronger electron-withdrawing group (N02) has a larger stabilizing effect at a para position than at an ortho position with respect to the reaction center.63-64... 

Table 5 Factors to Calculate Savings at Retirement to Maintain Purchasing Power of Pension 3% Inflation 4% Inflation 5% Inflation Years of Rate of Return Rate of Return Rate of Return Retirement 6% 7% 8% 9% 6% 7% 8% 9% 6% 7% 8% 9% ...

The industrial gases industry routinely manages to earn attractive return rates. From 1992 to 2004, the average annual return on invested capital (ROIC) before tax was 13.6 percent. The industry s profitability was thus between that of specialty chemicals (17.8%) and commodities (12%), but more stable. In 2004, industrial gases almost came out on top of specialties, due to the latter s declining profitability in the second half of the 90s (Fig. 11.2).3) Air, its main raw material, is free , and its products are probably the purest commodities from a chemical point of view. In any case, the industrial gases industry has managed to deliver better and less volatile returns than the commodity chemicals sector. 

Figure 12.2 Foraging activity at harvester ant colonies was affected by the simulated return rate of patrollers back to the colony. Letters above bars denote differences in statistical significance among treatments (LSD, p < 0.05). Error bars denote standard error of the mean. From Greene and Gordon, 2007a.

Sinter returns. This is usually the minus in. (0.6 cm) or minus f in. (1 cm) material separated from the sintered product and recycled to the feed end of the machine. An optimum value of sinter returns rate exists to maximize bed permeability. In current practice 20% to 30% of the machine discharge is recycled. 

The 110 out of 500 (22 per cent) who did return the questionnaire are a self-selected minority. We already know that they differ in one way — they did return the questionnaire, while the other 78 per cent did not. However, is this decision to complete the form just random or is it linked to other personal characteristics It would be a brave (foolhardy ) researcher who was prepared to assume that returning or not returning the questionnaire was a purely random choice. The reality is that there are all sorts of ways in which the returners may differ from the non-returners. With a return rate as low as 22 per cent, we could be dealing with a highly unrepresentative minority and any conclusions will be biased towards whatever type of person happens to be most likely to return our questionnaire. 

You need adequate numbers and an adequate return rate... 

It is not enough simply to get an adequate number of completed questionnaires, it is also vital to obtain a satisfactory return rate. 

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