Average annual rate of return method

Input(s)

C: Initial Investment/Capital ($)

I: Interest paid by "i" rate for the Capital ($)

$i$: Rate of Interest (per cent)

B: Total Balance not Amortized ($)

$D$: Present worth Factor (dimensionless)

Output(s)

P: Profit ($)

E: Total Net Undiscounted Cash Flow during the whole project ($)

$r$: Annual Average Rate of Return ($)

Formula(s)

Reference(s)

Serpen, U., Petroleum Economics, Course Notes, ITU Petroleum and Natural Gas Engineering, Istanbul, Turkey, (2008) Page: 40.