Hurdle rate

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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.

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