MARR (Minimum Acceptable Return)

Measured as

Measure MARR (Minimum Acceptable Return) with the same date, unit basis, and accounting or policy definitions used in the rest of your model.

Misused when

• Using a single MARR for projects with very different risk profiles.
• Confusing MARR with IRR (MARR is your required threshold; IRR is a project's implied return).

Operator takeaway

• Treat MARR as your opportunity cost and risk threshold.
• Use the same MARR when comparing comparable-risk projects; adjust MARR when risk differs.
• Tie MARR (Minimum Acceptable Return) to the same balance-sheet date, scenario, and decision memo you are using elsewhere in the model.
• Document which claims, costs, or adjustments your team includes before comparing numbers across forecasts, covenants, or valuation work.

Next decision

• Quantify the impact with NPV Calculator if you need to turn the definition into an operating assumption.
• Read Investment decision metrics: NPV vs IRR vs payback vs PI if the decision depends on interpretation, policy, or trade-offs beyond the raw formula.