Engineering Economy
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Profitability and Economic Choice
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Glossary of
Business and
Economic
Choice

To use the glossary, simply click on the first letter of the term of interest below:

j: In economic equations, effective annual interest rate for continuous compounding.

MACRS: Modified Accelerated Cost Recovery System.
MAR: Minimum Acceptable Revenue or Rate.
MARR: Minimum Acceptable Rate of Return (on capital). The smallest amount of revenue considered acceptable for an organization to undertake a project. Typically, MARR is equal to the cost of capital plus a return. Sometimes referred to as the hurdle rate.
Minimum Acceptable Revenue (MAR): An assumed project-related revenue that just covers off income taxes, plus exactly realizes an organization's minimum acceptable rate of return on capital or MARR. Such a project can be said to carry its own costs and not be a burden on the organization.
Modified Accelerated Cost Recovery System: An IRS prescribed straight-line depreciation approach.

N: In economic equations, the Number of periods.
Net Present Value: In an economic study, the present worth of all cash flows including revenue over the study life. When NPV equals zero, the project is break-even for the organization while a negative NPV denotes a loss and positive NPV a profit.
Net Salvage: A cash flow in a comparative or normal economic study relating to the sale of retired property including removal cost.
NPV: Net Present Value, which see.