Hurdle rate
Hurdle rate is the project cost of capital, or discount rate. It is the rate used to discount future cash flows in the net present value method or to compare with the internal rate of return.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Hurdle rate. The project cost of capital, or discount rate. It is the rate used to discount future cash flows in the net present value method or to compare with the internal rate of return.
According to Cost Accounting by Horngren, Datar, Rajan (14th edition),
- Hurdle rate. See required rate of return (RRR).
According to Managerial Accounting by Braun, Tietz (5th edition),
- Hurdle rate. Management's minimum desired rate of return on an investment; also called the discount rate and required rate of return.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
