The hurdle rate is the minimum acceptable return on an investment that a company expects to achieve before undertaking a project. It serves as a benchmark for evaluating potential investments and is typically based on the company's cost of capital, as well as the risk associated with the specific project. A project is considered worthwhile if its expected return exceeds this threshold, which helps companies prioritize their investment decisions effectively.
congrats on reading the definition of hurdle rate. now let's actually learn it.