Minimum return (pa%)

Formal

Companies raise money through Shares and Loans to run their businesses. These providers of capital require a return rate from the company for the use of funds. Therefore when considering monies spent for investment, companies must ensure that the rate generated from the investment is higher than the aggregate combined interest cost of loans and the dividend requirements of shareholders. This aggregate rate is the ‘Minimum Return Rate’
e.g. - Minimum Return Rate 9%
IRR of project 12%
Investment return exceeds Minimum return (pa%) therefore project acceptance likely. Typical minimum return (pa%) rates are between 8% and 15% depending upon industry and risk profile.

Real-world Example

A company sets a minimum return of 10% per annum as the bar any new investment must clear before it's considered worthwhile - often used interchangeably with hurdle rate or discount rate in appraisal models.