Aggregate Return On Investment for investments under uncertainty

Theoretically, the AROI approach constitutes a link between arbitrage choice theory and corporate investment theory, and shows that explicit discounting is not necessary for measuring economic profitability. Practically, the AROI is a user-friendly, easy-to-compute rate of return derived from the same set of data required by the net present value (NPV). Also, it does not incur the difficulties met by the internal rate of return (IRR): in particular, it is unique and it is based on economically significant capital values (i.e., market-driven values). As such, the AROI significantly expresses the efficiency of the project׳s invested capital.