Interpreting the Realizable Rate of Return
The "realizable rate of return" (RRR), which Schallau and Wirth suggested (Journal of Forestry, December 1980, p. 740) as a possible measure for ranking investment alternatives, can be biased against long-lived investments unless an adjustment is made for different project durations. Also, for any given internal rate of return. RRR will asymptotically approach the alternative rate as investment life lengthens. Thus, extremely attractive long-term investments may appear mediocre when evaluated with the RRR, unless the analyst fully understands the relationships between RRR and investment life.
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Document Type: Journal Article
Affiliations: Associate Professor of Forest Economics, Virginia Polytechnic Institute and State University, Blacksburg
Publication date: 1981-09-01
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- The Journal of Forestry is the most widely circulated scholarly forestry journal in the world. In print since 1902, the Journal has received several national awards for excellence. The mission of the Journal of Forestry is to advance the profession of forestry by keeping forest management professionals informed about significant developments and ideas in the many facets of forestry: economics, education and communication, entomology and pathology, fire, forest ecology, geospatial technologies, history, international forestry, measurements, policy, recreation, silviculture, social sciences, soils and hydrology, urban and community forestry, utilization and engineering, and wildlife management. The Journal is published bimonthly: January, March, May, July, September, and November.
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