TY - GEN
T1 - Fuzzy IRR with fuzzy WACC and fuzzy MARR
AU - Bas, Esra
PY - 2012
Y1 - 2012
N2 - In this paper, several uncertainties are considered for investment acceptability decision by IRR method. First, some parameters in weighted average cost of capital (WACC) equation are assumed to be fuzzy numbers, a fuzzy WACC is obtained, and defuzzified by t-norm and t-conorm fuzzy relations. Assuming that WACC is a minimum threshold for minimum attractive rate of return (MARR), fuzzy MARR is determined to be greater than or equals to fuzzy WACC. Finally, by assuming the net cash flows to be fuzzy numbers, a fuzzy IRR formula is obtained, defuzzified by t-norm and t-conorm fuzzy relations, and the results are compared to fuzzy MARR to evaluate the acceptability of a pure and simple investment. This study is an extension of Bas (2008) where t-norm and t-conorm fuzzy relations are considered for the defuzzification of fuzzy IRR formula.
AB - In this paper, several uncertainties are considered for investment acceptability decision by IRR method. First, some parameters in weighted average cost of capital (WACC) equation are assumed to be fuzzy numbers, a fuzzy WACC is obtained, and defuzzified by t-norm and t-conorm fuzzy relations. Assuming that WACC is a minimum threshold for minimum attractive rate of return (MARR), fuzzy MARR is determined to be greater than or equals to fuzzy WACC. Finally, by assuming the net cash flows to be fuzzy numbers, a fuzzy IRR formula is obtained, defuzzified by t-norm and t-conorm fuzzy relations, and the results are compared to fuzzy MARR to evaluate the acceptability of a pure and simple investment. This study is an extension of Bas (2008) where t-norm and t-conorm fuzzy relations are considered for the defuzzification of fuzzy IRR formula.
KW - fuzzy IRR
KW - fuzzy MARR
KW - Fuzzy WACC
KW - t-norm/t-conorm fuzzy relations
UR - https://www.scopus.com/pages/publications/84868277769
U2 - 10.1007/978-3-642-31724-8_41
DO - 10.1007/978-3-642-31724-8_41
M3 - Conference contribution
AN - SCOPUS:84868277769
SN - 9783642317231
T3 - Communications in Computer and Information Science
SP - 393
EP - 402
BT - Advances in Computational Intelligence - 14th International Conference on Information Processing and Management of Uncertainty in Knowledge-Based Systems, IPMU 2012, Proceedings
T2 - 14th International Conference on Information Processing and Management of Uncertainty in Knowledge-Based Systems, IPMU 2012
Y2 - 9 July 2012 through 13 July 2012
ER -