According to wikipedia, hurdle rate is  minimum acceptable rate of return for accepting any project. Generally, we know that hurdle means obstacle. These obstacle may be of risk of losses. So, you need return on your investment. Company leaves that project which is not providing you minimum rate of return or hurdle rate. It is just like cut off rate or IRR or cost of capital.

We can calculate hurdle rate with following formula:

= Interest for risk-free loans + Expected rate of inflation + Anticipated change in the rate of inflation + Risk of defaulting on a loan + Risk profile of a particular venture

Steps for calculating Hurdle Rate

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Accounting Education: Hurdle Rate (Finance)
Hurdle Rate (Finance)
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Accounting Education
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