Bounding and Guessing a Project's Rates of Return

A project's rate of return (ROR) [The list of all the acronyms used in his text is provided at its end.], be it an internal or external one, usually needs to be approximated. The success and efficiency of an approximation procedure depend on the quality of the initiating parameters such as bounds or seed values (guesses). Current approximation procedures commonly use bounds and guesses dictated by intuition rather then by mathematical consideration. The paper presents three ROR-bounding and six ROR-guessing approaches and examines their suitability on the examples of the typical project cash flow patterns.