Required Return The required return is the same as the appropriate discount rate and is based on the risk of the cash flows We need to know the required return for an investment before we can compute the NPV and make a decision about whether or not to take the investment We need to earn at least the required return to compensate our investors for the financing they have provided4 Required Return n The required return is the same as the appropriate discount rate and is based on the risk of the cash flows n We need to know the required return for an investment before we can compute the NPV and make a decision about whether or not to take the investment n We need to earn at least the required return to compensate our investors for the financing they have provided