ACCRUAL Definition

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ACCRUAL is the recognition of revenue when earned or expenses when incurred regardless of when cash is received or disbursed.

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HURDLE RATE is a term used in the budgeting of capital expenditures meaning the REQUIRED RATE OF RETURN in a DISCOUNTED CASH FLOW analysis. If the expected rate of return on an investment is below the hurdle rate, the project is not undertaken. The hurdle rate should be equal to the INCREMENTAL COST OF CAPITAL.

SECURITY dependent upon usage is: a. a guarantee that an obligation will be met; b. defense against financial failure; financial independence; c. property that your creditor can claim in case you default on your obligation; or, d. a formal declaration that documents a fact of relevance to finance and investment; the holder of which has a right to receive interest or dividends, e.g. stocks and bonds.

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