Research Article Open Access

A Measurement of Return for Mutually Exclusive Project under Ambiguity: Fuzzy Average Internal Rate of Return (FAIRR)

Abstract

The main objective of this article is to analyze the average internal rate of return (AIRR) and the standard average internal rate of return (SAIRR) metrics on ambiguity contexts where fuzzy logic prevails. Either AIRR or SAIRR are employed improving the traditional IRR problems while determining cash flow returns. Having this in mind, we analyze, through a didactic hypothetical case, different AIRR aspects: its consistency in setting in order mutually exclusive projects of different size or scale; it congruency with the expected rate or the expected cash flow rate; and its versatility to adapt itself to fuzzy logic while keeping its coherence with net present value in setting in order alternatives.

Gastón Milanesi*, Gabriela Pesce and Emilio El Alabi

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