Subject: Re: [office-comment] Statistical SUMMARY() function
Hi Sheldon, From what I can gather the term "economic rate of return" has multiple meanings. In IDB use, where it is abbreviated as EIR not ERR, it uses a calculation involving shadow pricing to account for economic opportunity costs. To me this sounds like something that one would do in a model in a spreadsheet, not as a single spreadsheet function. Consider: each of your cash flows could involve an arbitrary discount based on what are essentially project-specific judgement calls as well as addition costs to reflect social or environmental costs. Do you think these assumptions would make a cohesive spreadsheet function? If so, what would the function look like? What would its parameters be? Regards, -Rob Sheldon Britton <firstname.lastname@example.org> wrote on 06/04/2008 03:33:26 PM: > Hi Robert, > > Thank you very much for the timely response and the opportunity to > raise the question. > > From working experience I am now also taking the opportunity to > forward documentation (see attachment) which describes the > procedures for the return/computation of Economic Rate of Return > (ERR) values as distinct from those of the return/computation of > Internal Rate of Return (IRR) as defined in formula listings of > OpenOffice's Calc, IBM's Lotus 1-2-3, IBM's Lotus Symphony's 1.0 > SpreadSheet et cetera et cetera. > > Re: "So how to turn an IRR into an ERR? I suppose the joke answer > would be "Invest in sub-prime mortgages"; Wow... (was that "ENRON" > or "sub-prime" ;-) ! > Response: Which better company to be with other than the one (IBM) > which now have the responsibilities for the Federal Housing Loans > origination port folio; and, beyond these let us look at the " > services opportunities" (delivery solutions...) in the world's > energy and commodities markets (food...) among others in that IBM's > "Lotus Symphony" like "OpenOffice" can be freely obtained. $$$ :-D > > Also, "But seriously, my understanding is that Internal Rate of > Return, as we define it in OpenFormula, is the same as what some > practitioners call "Economic Rate of Return". > > The attached documentation which describes "Economic Rate of Return" > employed by the Inter-American Development Bank ( http://www.iadb.org > ) I am quite sure will undoubtedly provide some clarification and > further understanding about this issue.