Comment by layer8
4 hours ago
Yeah, but my experience with what is considered a profitable project is firmly in the two-digits percentage range. Anything single-digit would count as a fairly low floor.
4 hours ago
Yeah, but my experience with what is considered a profitable project is firmly in the two-digits percentage range. Anything single-digit would count as a fairly low floor.
Single digit is fairly normal in several of the industries I have detailed knowledge of. Though now interest rates are up most are targeting 10-12%.
A lot of it depends on the risk. For something that has a profile more like venture you might need a 15-20% return. There are also fixed overheads so you also need an element of scale.
You characterized the risk-free interest rate as “a pretty high floor”. I find this surprising. How are 4–7% gains a pretty high floor? Year-to-year fluctuations often already are in that range.