F       G       H       I       J F Top G Top H Hurdle rate of return: the minimum internal rate of return acceptable to the sponsor of a particular project. Top I Impact: the impact of an event is the value of the effect of the risk event, if it occurs, on one or more of the financial parameters of the investment. Internal rate of return (IRR): the return which can be earned on the capital invested in the project, i.e. the discount rate which gives an NPV of zero. This is equivalent to the yield on the investment. Investment: the creation of real or tangible capital, for example in the construction of a building or a piece of machinery, which will generate a flow of goods and services to be consumed in the future. We also use the word ‘investment’ to mean the assets and business activity resulting from a specific project which has been financed by capital sums. Investment life-cycle: the lifetime of a project from inception to ultimate termination (see Section 2.3). Often there is uncertainty about the length of time over which a project will be operating and assumptions will have to be made. Investment model: a framework for evaluating the likely profitability of the investment. Top J Top