Topical Terminology > Hurdle Rate
Hurdle Rate
For Hurdle Rate we have terms and definitions in 2 topics. The topics are Accounting and Finance.
Hurdle Rate (Accounting) 
is a term used in the budgeting of capital expenditures meaning the REQUIRED RATE OF RETURN in a DISCOUNTED CASH FLOW analysis. If the expected rate of return on an investment is below the hurdle ratethe project is not undertaken. The hurdle rate should be equal to the INCREMENTAL COST OF CAPITAL.
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Hurdle Rate (Finance)
The required return in capital budgeting. For example, if a project has an expected rate of return higher than the hurdle rate, the project may be accepted.
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