HURDLE RATE Definition

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.

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YIELD ON STOCK is the percentage of the annual dividend to the current price of the stock, e.g., a $30 stock with a dividend of $2.00 has a yield of 6.6%.

ORDER is a listing of goods or services requested from a supplier with specifications and desired delivery method.  A company starts the purchase process internally with a requisition, which results in an order being transmitted to a supplier.  When the supplier ships the goods or provides the service, an invoice is sent to the customer telling the customer the specifications, delivery method, and price of those goods or services.

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