{"id":197855,"date":"2025-03-07T18:40:18","date_gmt":"2025-03-07T18:40:18","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=197855"},"modified":"2025-03-07T18:40:20","modified_gmt":"2025-03-07T18:40:20","slug":"marr-is-minimum-attractive-rate-of-return","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/03\/07\/marr-is-minimum-attractive-rate-of-return\/","title":{"rendered":"MARR is minimum attractive rate of return"},"content":{"rendered":"\n<p>MARR is minimum attractive rate of return.<\/p>\n\n\n\n<pre class=\"wp-block-code\"><code>     True False<\/code><\/pre>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n<p>The correct answer is <strong>False<\/strong>.<\/p>\n\n\n\n<p><strong>Explanation:<\/strong><\/p>\n\n\n\n<p>MARR (Minimum Attractive Rate of Return) refers to the minimum return that a company or investor expects to receive from an investment or project. It represents the lowest rate of return that justifies undertaking a particular project or investment. The MARR is a critical benchmark in decision-making processes, particularly in capital budgeting, where companies evaluate potential investments or projects based on their expected returns.<\/p>\n\n\n\n<p>On the other hand, <strong>the term &#8220;Minimum Attractive Rate of Return&#8221; does not specifically mean that the rate is the minimum required to make a project worthwhile.<\/strong> It is the minimum threshold rate that is set by the investor or the company for evaluating investments. It is important because it serves as a benchmark against which the profitability and viability of an investment are judged. If the expected rate of return from a project is greater than or equal to the MARR, then the project may be deemed acceptable. If it falls below the MARR, the project would typically be rejected.<\/p>\n\n\n\n<p>The MARR is influenced by several factors:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Risk Profile of the Project<\/strong>: Higher risk projects usually have higher MARR to compensate for the risk.<\/li>\n\n\n\n<li><strong>Opportunity Cost of Capital<\/strong>: The MARR must also be greater than the cost of capital, which represents the opportunity cost of investing in a particular project rather than other potential alternatives.<\/li>\n\n\n\n<li><strong>Inflation and Market Conditions<\/strong>: Economic factors, including inflation and the general state of the market, also impact the determination of the MARR.<\/li>\n<\/ol>\n\n\n\n<p>It&#8217;s worth noting that MARR is often used in methodologies like the Net Present Value (NPV) and Internal Rate of Return (IRR) in capital budgeting decisions. A project will typically be accepted if its IRR is greater than or equal to the MARR.<\/p>\n\n\n\n<p>In conclusion, <strong>MARR<\/strong> is not the minimum rate of return that a project can ever generate but the minimum level of return that would make the project or investment attractive to pursue.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>MARR is minimum attractive rate of return. The correct answer and explanation is : The correct answer is False. Explanation: MARR (Minimum Attractive Rate of Return) refers to the minimum return that a company or investor expects to receive from an investment or project. It represents the lowest rate of return that justifies undertaking a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-197855","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/197855","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=197855"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/197855\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=197855"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=197855"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=197855"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}