Economic rate of return (ERR)

Economic rate of return (ERR),

Definition of Economic rate of return (ERR):

  1. Interest rate at which the cost and benefits of a project, discounted over its life, are equal. ERR differs from the financial rate of return in that it takes into account the effects of factors such as price controls, subsidies, and tax breaks to compute the actual cost the project to the economy.

Meaning of Economic rate of return (ERR) & Economic rate of return (ERR) Definition