Required Rate Of Return: Definition and additional resources from BNET
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BNET Business Dictionary

Business Definition for: Required Rate Of Return

  • the minimum return for a proposed project investment to be acceptable

Additional Resources

Internal Rate of Return: A Cautionary Tale - Tempted by a Project With a High Internal Rate of Return? Better Check Those Interim Cash Flows Again
Many executives use the internal rate of return as the measure of a proposed project's long-term value. This approach does have intuitive appeal, but the complicated model used to calculate the internal rate of return makes certain assumptions that exaggerate a project's true value. Companies and their advisers use the...
Tags: Investment, Rate, Finance
White papers 2004-08-01
What Stock Price Achieves My Target Rate Of Return?
This calculator computes the price at which you will have to sell shares of stock to realize your desired rate of return. You select whether you want your return to be calculated before or after income and capital gains taxes. You enter your expected holding period, average quarterly dividend and...
Tags: Stock, Rate, Kiplinger Washington Editors, Calculator, Taxes, Free Trade, Investment, Financial Accounting, Financial Planning, Finance, Stock Price
Tools & templates 2008-01-01
Inflation Protected Securities - The Missing Link
Investors usually focus on the nominal rate of return on their investments, but the real rate of return is what really matters. So, if someone told you about a security that guarantees a real rate of return over inflation with no credit risk, you would of course be interested. While...
Tags: Investopedia, Inflation, Rate, Currency & Foreign Exchange, Security, Finance
White papers 2004-09-15
Economic and Accounting Rates of Return
The rate of return on invested capital is a central concept in financial analysis. Financial statement users make regular use of the accounting rate of return ARR rather than the economic rate of return IRR to assess the performance of corporations and public-sector enterprises, to evaluate capital investment projects, and...
Tags: Financial Services, Operational Accounting, Financial Accounting, Finance, Financial, Accounting
White papers 2000-10-01
What Fund Share Price Achieves My Target Rate Of Return?
This tool calculates the price at which you will have to sell shares of a mutual fund to realize your desired rate of return. Returns are calculated before and after taxes. The tool deducts brokerage fees and taxes (for after-tax returns) and calculates your return on an annualized basis.
Tags: Tool, Rate, Leadfusion, Returns, Taxes, Mutual Funds, Productivity, Free Trade, Retirement Plans, Financial Planning, Finance, Human Resources, Benefits
Tools & templates 2008-01-01
Exchange-Rate Risk Mitigation With Price-Level-Adjusting Mortgages: The Case of the Mexican UDI
In 1995, Mexico introduced a price-level-adjusting unit of account called the Unidad de Inversion UDI. Loans denominated in UDIs maintain their purchasing power and provide a real rate of return in pesos. This study examines the real rate of return earned by dollar investors in UDI mortgages and the extent...
Tags: Exchange Rate, California State University, Capital Structures, Finance, Free Trade, Mortgages, Mexico
White papers 2003-03-07
How Much Do Fees Affect My Stock's Rate Of Return?
This calculator calculates how brokerage fees you pay to buy and sell shares of stock reduce the rate of return on a stock investment. The calculator assumes you sell your shares at the current share price. Dividends that you have received while owning the shares are assumed to have been...
Tags: Stock, Rate, Kiplinger Washington Editors, Calculator, Investment, Finance
Tools & templates 2008-01-01
How Much Do Fees Affect My Stock's Rate Of Return?
This tool calculates how brokerage fees you pay to buy and sell shares of stock reduce the rate of return on a stock investment. The tool assumes you sell your shares at the current share price. Dividends that you have received while owning the shares are assumed to have been...
Tags: Stock, Rate, Leadfusion, Investment, Finance
Tools & templates 2008-01-01
Insurer rate of return cut nearly in half for '94.
Wall Street and Mother Nature combined last year to nearly cut in half the rate of return for U.S. property and casualty insurers, an industry study has found. The property-casualty industry's rate of return for 1994 dropped to 5.5 percent from 10.4 pWall Street and Mother...
Tags: industry, insurance company, ISO
Research articles 1995-07-10
Knocking on Venture-Capital Doors
Article is about how to find money to take the company to the next level. Venture capitalists VCs have literally billions of dollars to invest. Learn how to attract VC attention and get the funding. VC investors are notoriously picky. They typically look at more than 100 business plans for...
Tags: Article, Edward Lowe Foundation, Investment, Finance, Financing Startups, Venture Capital, Investor
White papers 2003-01-01
What Is The Return On My Real Estate Investment?
Purchase price, loan terms, appreciation rate, taxes, expenses and other factors are considerations when evaluating a real estate investment. Use this tool to help you determine your potential IRR Internal Rate Of Return on a property.
Tags: Yahoo! Inc., Investment, Real Estate, Business Operations
Tools & templates 2008-01-01
How Large Is The Premium On Expected Rate Of Return For Initial Public Offer Firms?
This paper examines the expected rate of return and expected growth premia implied by price, book value, and forecast earnings for firms that engaged in an Initial Public Offering IPO relative to more seasoned firms. It was documented that on average the expected rate of return and expected growth IPO...
Tags: Financial Services, Finance, Financial Planning, IPO, Investment
White papers 2006-04-01
Correct rate of return for Phoenix Aim VCT.
The Phoenix Aim VCT Trust has asked us to point out that its internal rate of return is ... The Phoenix Aim VCT Trust has asked us to point out that its internal rate of return is 7.51 per cent and not -7.51 per cent as ...
Tags: Phoenix Technologies
Research articles 2004-02-27
Should I Sell My Stock Now And Invest The Money Elsewhere?
You may be tempted to sell stock you now own if you believe another investment will provide a higher rate of return. However, if you sell, you may incur transaction fees and income taxes that reduce both your return and the amount available for the new investment. Additionally, you may...
Tags: Stock, Kiplinger Washington Editors, Investment, Finance
Tools & templates 2008-01-01
Mortgage Required Income
What income is required to qualify for a mortgage? That largely depends on your monthly debt payments and the current interest rate. This tool collects these important variables and determines your required income to qualify for your desired mortgage amount.
Tags: Income, Mortgages, Operational Accounting, Finance, Capital Structures
Tools & templates 2008-01-01
Developing a Capital Asset Pricing Model
CAPM describes the relationship between risk and expected return for an individual portfolio or security. Its underlying theory has prompted lively discussion about what “risk” actually means, asserting that only “systematic” (non-diversified) risk brings real reward to investors. Systematic risk is unavoidable, market-oriented risk that cannot be averaged out through...
Tags: Financial accounting, volatility, theory, asset, security, stock market, stock, advisor, Capital Asset Pricing Model, Investment, CAPM, BNET Editorial, Investor, Beta, Risk
Articles 2007-10-12
Internal Rate Of Return: A Cautionary Tale
From the executive summary: ‘For decades, finance textbooks and academics have warned that typical Internal Rate of Return IRR calculations, build in reinvestment assumptions, make bad projects look better and good ones look great. Yet, academic research found that three-quarters of CFOs always or almost always use IRR when evaluating...
Tags: Financial Accounting, Finance, McKinsey & Co.
White papers 2004-10-20
What Rate Do I Need To Support My Retirement?
Use this tool to find out what rate of return you would need to make recurring withdrawals of a specified amount from an account.
Tags: Retirement, Withdrawal, Productivity
Tools & templates 2008-01-01
Hurdle? What Hurdle?
Preferred return first was introduced during the mid to late 1980s when the private equity industry was still in its infancy. The rationale for its introduction was to ensure that general partners could not be compensated for indifferent performance. It was also meant to ensure that investors had a distribution...
Tags: Invesco, Business Structures, Finance
White papers 2003-11-11
Retirement Savings Rate Calculator
Use this tool to find out what rate of return you would need to make recurring withdrawals of a specified amount from an account.
Tags: Withdrawal, TimeValue Software, Productivity
Tools & templates 2008-01-01
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