Incorporating Investment Opportunities into Economic Evaluations to Minimize Corporate Revenue Requirements

A revised methodology for performing economic evaluations is presented in this paper which incorporates an investment opportunity analysis in the conventional Minimum Revenue Requirement (MRR) Method. The method presented in this paper is termed the Minimum Revenue Requirement-Investment Opportunity Return (MRR-IOR) Method. This investment opportunity analysis minimizes revenue requirements on a corporate basis and recognizes the present environment of limited capital availability.