Capital Budgeting
Hurdle Rate
Definition
What is Hurdle Rate?
The minimum acceptable return for an investmentAn asset or commitment of money made with the expectation of future income, growth, or both. or project.
Example in practice
How This Looks in Practice
Management rejects projects expected to earn less than 16%.
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Related Terms
Capital Budgeting
Net Present Value
Present value of expected cash inflows minus present value of expected cash outflows.
Capital BudgetingInternal Rate of Return
The discount rate that makes a project's net present value equal to zero.
Capital BudgetingModified Internal Rate of Return
A return measure that uses specified financing and reinvestment rates rather than assuming reinvestment at the IRR.
Company DisclosuresAnnual Report
A yearly publication containing financial statements, management discussion, governance information, and other disclosures.