hurdle rate
Required investment benchmark
A hurdle rate is the minimum acceptable return on an investment—the threshold a project must clear to be worth pursuing.
In corporate finance, proposals that don't exceed the hurdle rate get rejected: With a hurdle rate of 12%, any project returning less isn't worth our capital.
The metaphor comes from track hurdles that runners must clear to continue.
- benchmarkStandard for comparison
- thresholdPoint of beginning
- cutoffPoint of termination
- pass the barSucceed at attorney certification
- returnGo back again
investment · discount · barrier · minimum · capital · risk · project · IRR · NPV · approval · reject · portfolio · opportunity · cost · make or break · clearance · target · performance
- corporate financecost of capital, investment, capital markets, NPV, debt financing
- interest ratesinterest, interest charge, interest income, interest payments, compound interest
- Hedge Fundsoffshore fund, management fee, high water mark, NAV, carry
- private equityleveraged buyout, leveraged buyouts, LBO, buyouts, general partner
- financebank, CFO, banks, controller, finance
- investment returnsdividends, ROI, capital gains, returns, profit