Open AccessAn Efficient Algorithm For Calculating Yields And Durations
Author(s) -
Delvin D. Hawley,
Larry J. Johnson
Publication year - 2011
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.149
H-Index - 22
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v5i1.6375
Subject(s) - computation , computer science , internal rate of return , algorithm , yield (engineering) , cash flow , rate of return , econometrics , mathematical optimization , mathematics , economics , finance , production (economics) , macroeconomics , materials science , metallurgy
This paper presents an algorithm for the computation of yields (or internal rates of return) which offers several important advantages over traditional computational algorithms. The method described here is extremely efficient in zeroing in on the correct discount rate or yield in a remarkably small number of iterations. It is particularly useful in the calculation of internal rates of return for projects with erratic cash flows.