H. Kent McMath Thomas L. Zeller

Abstract

Previous analytical and empirical work has shown that the Cash Recovery Rate (CRR) method is a useful technique for estimating a firms conditional internal rate of return (CIRR). This paper offers a new approach to estimating the investment growth rate used in the CRR method. The new approach reduces bias in estimating a firms CIRR by the CRR method. This work strengthens the theoretical soundness and research usefulness of the CRR method.