Project Return and Hurdle Rate Tools

Project return pages explain the return measures companies use to screen capital projects.

This subsection groups return-threshold and IRR-related methods used in investment appraisal.

In this section

• Accounting Rate of Return: The Simple Project-Profitability Screen
  Learn what the accounting rate of return measures, how it differs from NPV and IRR, and why finance teams still use it despite its limitations.
• Hurdle Rate: The Minimum Return a Project Must Earn to Be Worth Accepting
  Learn what a hurdle rate is, how firms use it in capital budgeting, and how it relates to WACC, required return, and project risk.
• Internal Rate of Return (IRR) versus Modified Internal Rate of Return (MIRR): Understanding Their Differences
  A detailed comparison between Internal Rate of Return (IRR) and Modified Internal Rate of Return (MIRR), highlighting their definitions, applications, and key differences.
• Modified Internal Rate of Return (MIRR): A More Realistic Alternative to IRR
  Learn what MIRR measures, why analysts use it instead of plain IRR in some cases, and how separate finance and reinvestment rates change the result.