Hurdle Rate

Definition The minimum rate of return on a project / investment a company set for project screening. This allow companies to make decision on whether to pursue a specific project. Usually is a function of the company’s weighted average cost… Read More ›

What NPV@IRR% means?

Common Indicator for Decision Making The 2 commonly used indicators for decision making are Net Present Value (NPV) and Internal Rate of Return (IRR). IRR (%) is the discount rate which makes the present value of the net cash flow… Read More ›

Capital Allowance Concept

Definition Reduction in the amount of corporation tax payable, often offered as an incentive for investment in large-scale projects (that increase a country’s production capacity and stock of capital). A certain percentage of the capital asset’s cost is allowed as… Read More ›

Money of the Day

The value of anything expressed simply in the MONEY of the day. Since INFLATION means that money can lose its value over time, nominal figures can be misleading when used to compare values in different periods. So, need to keep this in mind… Read More ›