What is MARR and what do you know about it?

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What is MARR and what do you know about it?

  • 22 Sep, 2018

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MARR, stands for Minimum Acceptable Rate of Return. It is also known as Hurdle Rate. This is the least rate of return that the company has set and decided to accept before the commencement of the project. With the help of this, the company is able to know the risks and hindrances in its way and the opportunity cost of shaping other projects. 

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Minimum Attractive Rate of Return is abbreviated as MARR. This rate indicates the lowest return rate that the project manager consents before a project is instigated. This concept is adopted over a wide variety to study the profits or the risks of one project over the other. IRR refers to the Internal rate of return.

Look at the relation between the two of them

Since every company sets its deadline for the rate of return, therefore, it is necessary to work with the correct decision making.

If MARR is greater than IRR, then the project is rejected.

If MARR is less than IRR, then the project is accepted and work upon. 

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