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Accounting > Hurdle Rate

The following information is about Hurdle Rate.

Hurdle Rate Defined

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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