In finance, the hurdle rate is used as a benchmark to assess the profitability of an investment. It is defined as the minimum acceptable return on an investment, which is set based on the cost of capital, the risk associated with the investment, and the investor's required rate of return. The hurdle rate is used by investors and companies to decide whether an investment opportunity is worth pursuing. If the expected return exceeds the hurdle rate, the investment is worth considering; otherwise, it may be rejected. This metric is crucial in capital budgeting, project financing, and venture capital investment decisions.