The rate of return is specific to a company and it is related how the company gets its funding for projects [1]. Moreover, it is the rate of return that the investor expects or the cost of borrowing money [1]. Other words, to determine R one would need to consider how much debt a company has or how much it owes, and how much money it gets from preferred and common stock a company invests in. Some factors that influence the R is one the rate of growth in a company’s revenue and earnings. The company’s growth rate can impact its stock price and thus the return the company gets from owning it.

A project should have a positive NPV because this will mean its returns exceeds what the financial market offers on investments of similar risks. Thus, companies have a concept called weighted average cost of capital (WACC) associated with a project, which is the minimum required return a company needs to earn to satisfy all of it investors, including stakeholders [2]. Thus, to come up with a project’s cost of capital, a company’s head must examine what the capital markets offer. Three major factors influence the rate of return: the cost of equity, the cost of debt and cost of preferred stock. Cost equity is the investment or funding a company get from equity investor. The cost of debt is how much a company owes to a lender. Lastly, the cost of preferred stock is a fix dividend expense a company has to pay for a certain period.

Reference:
[1] https://hbr.org/2014/11/a-refresher-on-net-present-value
[2] Ross, Stephen A., Randolph W. Westerfield, and Bradford D. Jordan. “Chapter 14 Cost of Capital.” Fundamentals of Corporate Finance. 11th ed. Macquarie Park, NSW: McGraw-Hill Australia, 2003. N. page. Print.