MARR (Minimum Acceptable Return)

Definition

MARR is the minimum return threshold used to evaluate investments. It is often used as a hurdle rate in capital budgeting and NPV decisions.

How to use it

• Treat MARR as your opportunity cost and risk threshold.
• Use the same MARR when comparing comparable-risk projects; adjust MARR when risk differs.

Common mistakes

• 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).

Why this matters

This term matters because cash timing and risk are usually the difference between a plan that works on paper and a plan that survives. Use consistent definitions so decisions are comparable over time.

Practical checklist

• Write a 1-line definition for "MARR (Minimum Acceptable Return)" that your team will use consistently.
• Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
• Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
• Use a calculator that references this term (e.g., NPV Calculator) to sanity-check assumptions.
• Read the related guide (e.g., Investment decision metrics: NPV vs IRR vs payback vs PI) for context and common pitfalls.

Where to use this on MetricKit