| Article ID: | iaor1991807 |
| Country: | Netherlands |
| Volume: | 18 |
| Issue: | 3 |
| Start Page Number: | 215 |
| End Page Number: | 221 |
| Publication Date: | Jan 1990 |
| Journal: | Engineering Costs and Production Economics |
| Authors: | Pohjola V.J., Turunen I. |
Profitability analysis is extended to situations where initial data can be expressed as fuzzy numbers. It is shown that the definition of internal rate of return (IRR) is ambiguous for fuzzy data and leads to an IRR which is a fuzzy number of type 2 (one with fuzzy boundaries). A subjective mean of a random fuzzy number enclosed by the fuzzy IRR of type 2 may be chosen as the final measure of profitability.