Hurdle rate and Mentor: Difference between pages

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A hurdle rate is an organisation's rate of return used for determining the viability of a proposed investment or other project.
1.


An independent experienced person in an organisation who advises and supports less experienced employees, sometimes known as 'mentees'.


The hurdle rate can be used in two ways:
The mentor is normally experienced in the mentee's professional specialism.


*As a target Internal rate of return, that proposals need to exceed.


*As a discount rate (r) to apply in Net present value analysis, do discount the future cash flows.
2.


A similarly independent person employed by a different organisation from the mentee.


:<span style="color:#4B0082">'''Example 1 - Internal Rate of Return (IRR)'''</span>


:Our organisation's hurdle rate is 7%.
==See also==
*[[Association of Corporate Treasurers]]
*[[Coach]]
* [[Glass ceiling]]
*[[USP]]
*[[Working effectively with others]]


:A proposal has an Internal rate of return of 5%.


:The IRR is lower than our hurdle rate.
==The ACT's Mentor Me scheme==


:Accordingly, the proposal is rejected.
The ACT runs a mentoring matching service for its members and students.


[https://www.treasurers.org/cpd/mentoring Mentor Me]


 
[[Category:Self_management_and_accountability]]
:<span style="color:#4B0082">'''Example 2 - Net Present Value (NPV)'''</span>
[[Category:Working_effectively_with_others]]
 
:Our organisation's hurdle rate is 7%.
 
:We use 7% to discount a proposal's future cash flows.
 
:If the Net present value is less than 0, the proposal will be rejected.
 
 
 
Hurdle rates are usually set with reference to the organisation's weighted average cost of capital.
 
They may be adjusted for different classes of project, with different levels of risk.
 
Riskier projects, or classes of project, would be allocated a higher hurdle rate.
 
 
== See also ==
* [[Cost of capital]]
* [[Discount rate]]
* [[Internal rate of return]]
* [[Net present value]]
* [[Rate of return]]
* [[Weighted average cost of capital]]
 
[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Investment]]

Revision as of 10:55, 6 October 2022

1.

An independent experienced person in an organisation who advises and supports less experienced employees, sometimes known as 'mentees'.

The mentor is normally experienced in the mentee's professional specialism.


2.

A similarly independent person employed by a different organisation from the mentee.


See also


The ACT's Mentor Me scheme

The ACT runs a mentoring matching service for its members and students.

Mentor Me

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