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Analyses

Computing an Internal Rate of Return

You are choosing between five investments. A portfolio containing these investments is available at SASHELP.INVSAMP.NVST. Which investments are acceptable if you expect a MARR of 9%?

Open the portfolio SASHELP.INVSAMP.NVST and compare the investments. Note that Internal Rate of Return computations assume regular periodicity of the cashflow. To compute the internal rates of return, follow these steps:

  1. Select all five investments.

  2. Select Analyze Internal Rate of Return.

Figure 52.4 Computing an Internal Rate of Return
Computing an Internal Rate of Return

The results displayed in Figure 52.4 indicate that the internal rates of return for investments 2, 4, and 5 are greater than 9%. Hence, each of these is acceptable.

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