financial return

One possible definition could be that financial return is the expected net cash inflow associated with a partcular course of action discounted at an appropriate rate (a rate which would take into consideration such factors as time value and uncertainty involved with the given cash flows).This cash flow could take a number of forms such as dividend or capital growth for a potential shareholder in a company. From a company’s point of view financial return from the net cash flows from a project should be disounted at the marginal cost of finance associated with financing a given project. Often,however, this boils down to calculating the Weighted Average Cost of Capital of a company if general funds are used and the project is not thought to scew the company’s risk profile to such an extent that WACC calculation would be affected.