do macroeconomic factors influence the hurdle rate 
external economic factors such as interest rates inflation and market volatility can significantly influence a company s hurdle rate for instance an increase in interest rates would lead to a higher cost of debt which would raise the company s wacc and thus the hurdle rate similarly higher inflation can increase the hurdle rate since the reduced buying power of future cash flows needs to be considered therefore hurdle rates are not static even for the same project companies must regularly reassess and adjust their hurdle rate to reflect changes in the wider economy the bottom linea hurdle rate is the minimum rate of return required for a company or investor to go ahead with a project most companies factor in a risk premium when determining their hurdle rate assigning a higher rate to riskier projects and a lower rate to projects with more moderate risks also known as break even yield the hurdle rate is very often a key factor in guiding investment decisions 