hurdle rate


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hurdle rate

n
(Banking & Finance) finance the rate of return that a proposed project must provide if it is to be worth considering: usually calculated as the cost of the capital involved adjusted by a risk factor
References in periodicals archive ?
Socioeconomic Planning Secretary Ernesto Pernia said the project which is under review by the technical board of the NEDAInvestment Coordination Committee (NEDA-ICC) passes the so-called hurdle rate or the minimum rate of return required to make the investment worthwhile.
In contrast, business segments with high or very high percentages of their revenues coming from lending products and are also performing badly on many or all of these levers are far below the ideal hurdle rate of 16 percent return on equity (ROE).
Most PMS charge a 2% annual fee and get 20% profit beyond a hurdle rate," says Prateek Pant of RBS Private Banking, which offers non-discretionary PMS.
The Fidelity China Special Situations investment trust, launched in April 2010 and managed by leading fund manager Anthony Bolton, carries a performance fee of 15% of any outperformance of its Net Asset Value (NAV) over the MSCI China Index, plus a hurdle rate of 2%.
For example, the distribution (60%, 15%, 25%) indicates that the project has a 60% chance of generating a return that is above the company's hurdle rate (the minimum amount of return that the company requires before they will make an investment in something), a 15% chance of yielding a return near the hurdle rate, and a 25% chance of creating a return below the hurdle rate.
For the reasons explained below, to the extent the Guardians miss the hurdle rate in any year, the government is losing money overall.
75% of the retailers surveyed said they were raising the required hurdle rate for real estate capital remodels and relocates, and a number described how were planning to defer or cancel the projects that did not meet their more stringent internal rates of return guidelines.
The international expansion for real estate has prompted us to re-examine hurdle rate analysis based on updates to our transparency measurement model.
Only if the pre-defined hurdle rate is not achieved will this Phase II trial continue with a second enrollment stage.
The capital charge rate employed is also often referred to as a hurdle rate.
Therefore, if your internal rate of return exceeds the hurdle rate, then your project is attractive, as it is expected to result in a positive net present value.
We propose that self-set rates will be more effective than imposed organization-set rates, as the former provides a stronger "psychological contract" between the manager and the hurdle rate.