ASTM E1057-15(2020)e1

Standard Practice for Measuring Internal Rate of Return and Adjusted Internal Rate of Return for Investments in Buildings and Building Systems (Includes all amendments and changes 5/6/2020).

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STANDARD published on 1.4.2020

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The information about the standard:

Designation standards: ASTM E1057-15(2020)e1
Publication date standards: 1.4.2020
SKU: NS-992882
The number of pages: 12
Approximate weight : 36 g (0.08 lbs)
Country: American technical standard
Category: Technical standards ASTM

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Contractual aspects

Annotation of standard text ASTM E1057-15(2020)e1 :

Keywords:

adjusted internal rate of return, building economics, discounting, economic evaluation methods, engineering economics, internal rate of return, net benefits, net savings, overall rate of return, payback, savings-to-investment ratio, terminal value ,, ICS Number Code 91.010.20 (Contractual aspects)

Additional information

Significance and Use

5.1 The IRR method has been used traditionally in finance and economics to measure the percentage yield on investment.

5.1.1 The IRR method is appropriate in most cases for evaluating whether a given building or building system will be economically efficient, that is, whether its time-adjusted benefits will exceed its time-adjusted costs over the period of concern to the decision-maker. However, it has deficiencies that limit its usefulness in choosing among projects competing for a limited budget.

5.2 The AIRR method is a measure of the overall rate of return that an investor can expect from an investment over a designated study period. It is appropriate both for evaluating whether a given building or building system will be economically efficient and for choosing among alternatives competing for a limited budget.

5.2.1 The AIRR method overcomes some, but not all, of the deficiencies of the IRR. The AIRR is particularly recommended over the IRR for allocating limited funding among competing projects.

1. Scope

1.1 This practice covers a procedure for calculating and interpreting the internal rate of return (IRR) and adjusted internal rate of return (AIRR) measures in the evaluation of building designs, systems, and equipment.

1.2 The values stated in inch-pound units are to be regarded as standard. The values given in parentheses are mathematical conversions to SI units that are provided for information only and are not considered standard.

1.3 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and determine the applicability of regulatory limitations prior to use.

1.4 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

2. Referenced Documents

E964-15(2020)e1	Standard Practice for Measuring Benefit-to-Cost and Savings-to-Investment Ratios for Buildings and Building Systems (Includes all amendments and changes 5/6/2020).
E2204-15(2020)e1	Standard Guide for Summarizing the Economic Impacts of Building-Related Projects (Includes all amendments and changes 8/24/2023).
E1946-18(2023)	Standard Practice for Measuring Cost Risk of Buildings and Building Systems and Other Constructed Projects
	Discount Factor Tables, Adjunct to Practices , , , , and
E631-15	Standard Terminology of Building Constructions
E833-14(2021)	Standard Terminology of Building Economics
E917-17(2023)	Standard Practice for Measuring Life-Cycle Costs of Buildings and Building Systems
E1074-15(2020)e1	Standard Practice for Measuring Net Benefits and Net Savings for Investments in Buildings and Building Systems (Includes all amendments and changes 5/6/2020).
E1121-15(2020)e1	Standard Practice for Measuring Payback for Investments in Buildings and Building Systems (Includes all amendments and changes 5/6/2020).
E1185-15(2020)e1	Standard Guide for Selecting Economic Methods for Evaluating Investments in Buildings and Building Systems (Includes all amendments and changes 5/6/2020).
E1369-15(2020)e1	Standard Guide for Selecting Techniques for Treating Uncertainty and Risk in the Economic Evaluation of Buildings and Building Systems (Includes all amendments and changes 5/6/2020).
E1765-16(2023)	Standard Practice for Applying Analytical Hierarchy Process (AHP) to Multiattribute Decision Analysis of Investments Related to Projects, Products, and Processes

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