The minimum rate of return on an investment - expressed as an annual percentage - that a company needs to generate in order to approve incremental spend. This minimum is imposed because companies themselves pay % interest for raising monies, and need to generate above this hurdle rate to account for risk etc. Some investment banks require at least 20% annual returns on their proposed investment, whereas some food companies need as little as 4%.
Companies pay interest or return profits on the monies they raise to run their business. When someone inside their own organisation wants to spend (or 'invest') monies, then a minimum projected return is insisted upon to justify spending in the first place. This is a 'hurdle' that you must exceed to gain approval. High levels of returns are required by banks and technology clients, where lower returns are needed from 'safe industries' such a food etc.
We need to confirm your email address.
To complete the subscription process, please click the link in the email we just sent you.
