00:01
So here we are talking about investment and we have this idea of the hurdle rate.
00:07
And so we should ask ourselves, do we know what the hurdle rate is? the hurdle rate is the minimum return necessary to justify investment or the cost of capital.
00:27
Right.
00:28
So, you know, you can look at an investment and say this investment is going to pay off one percent.
00:37
But you may say, look, well, even if it's going to make a profit of one percent, i have better uses for my money.
00:43
The company has better uses for the money.
00:45
So, yes, it makes a profit, but no, it's not worth doing.
00:48
So here the hurdle rate is eight percent.
00:51
Right.
00:52
So we want to do only projects paying greater or equal to eight percent.
01:02
That's what the hurdle rate means.
01:03
So if we look at the first project, right, the first five hundred thousand is paying nine percent.
01:13
That's the estimated rate of return.
01:15
So this is a good project...