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It is the lowest return on project or investment that will make the firm or investor to accept that project.
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∙ 15y ago
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What is minimum rate of return?
It is the lowest return on project or investment that will make the firm or investor to accept that project.
When a corporation weighs its return on investment for initiating a new project against the minimum standard investment return it has set before it the minimum standard investment return is referred t?
Hurdle rate
What is the cut off point for accounting?
Businesses attempt to estimate the possible income received by certain transactions. They then compare this amount to the necessary rate of return on the investment. Every investment has a necessary return (usually enough so the company doesn't lose money in the investment). The cutoff point, therefore, is the minimum rate of return. If a company invests in something with a projected 15% rate of return, but the minimum rate of return is 20%, then the company is better off not investing.
How can I get better in money market checking?
Many money market accounts have a minimum dollar amount to achieve a minimum rate of return. The maximum rate of return will differ from site to site but should be clearly explained in the application process. Read the application carefully.
How do you calculate minimum Required Rate of Return?
The minimum required rate of return, also known as the hurdle rate or cost of capital, can be calculated using the weighted average cost of capital (WACC) formula. The WACC is the weighted average of the cost of equity and the cost of debt, taking into account the proportion of each in a company's capital structure. The formula for WACC is: WACC = (E/V) * Re + (D/V) * Rd * (1 - T), where E is the market value of equity, V is the total market value of equity and debt, Re is the cost of equity, D is the market value of debt, Rd is the cost of debt, and T is the tax rate.
How would you describe the cost of capital?
The minimum rate of return the company must earn to be willing to make the investment. It is the rate of return the company could earn if, rather than making the capital investment, it invested the money in an alternative, but comparable, investment.
Where are the highestrates for CD / what bank?
Discover Bank currently offers a return of 3.7% on a minimum $2,500 investment for a 5-year CD rate.
How do women rate atractivness?
Individually. What is attractive for one may not be attractive for another.
How is expected rate of return calculated from average rate of return on investment and standard deviation?
The expected rate of return is simply the average rate of return. The standard deviation does not directly affect the expected rate of return, only the reliability of that estimate.
Are interest rate and rate of return the same?
Yes, the interest rate and rate of return are exactly the same.
What happens if the IRR is greater than the required rate of return?
The IRR rule states that if the internal rate of return (IRR) on a project or investment is greater than the minimum required rate of return - the cost of capital - then the decision would generally be to go ahead with it. Conversely, if the IRR on a project or investment is lower than the cost of capital, then the best course of action may be to reject it.
Does the capital asset pricing model help us to get required rate of return or expected rate of return?
expected rate of return
