Average Rate of return with Uncertainty

In investment appraisal, uncertainty can be managed throughintervals or fuzzy numbers. The arithmetical properties and the extension principle are well established and can be successfully applied in a rigorous way. In this paper we introduce uncertainty in the investment appraisal managed through a new criterion called Average Internal Rate of Return (AIRR), introduced in Magni (2010). The consistency of the arithmetic of variables represented with intervals of fuzzy numbers makes possible the application of the extension principle and a rigorous analysis of the investment decisions handled under uncertaintyconditions.