[amp_mcq option1=”Leverage” option2=”Hurdle rate” option3=”Risk rate” option4=”Return rate” correct=”option2″]<\/p>\n
The correct answer is: B. Hurdle rate<\/strong><\/p>\n A hurdle rate is the minimum rate of return that a company requires on a project or investment in order to consider it worthwhile. It is also known as the cut-off rate, the target rate of return, or the required rate of return.<\/p>\n The hurdle rate is calculated by taking into account the company’s cost of capital, which is the weighted average of the cost of debt and the cost of equity. The cost of debt is the interest rate that the company pays on its loans, and the cost of equity is the return that shareholders expect to earn on their investment in the company.<\/p>\n The hurdle rate is used to evaluate investment proposals. If the projected return on an investment is greater than the hurdle rate, then the investment is considered to be worthwhile. If the projected return is less than the hurdle rate, then the investment is not considered to be worthwhile.<\/p>\n The hurdle rate is an important tool for financial planning and decision-making. It helps companies to make sound investment decisions and to maximize their return on investment.<\/p>\n The other options are incorrect because:<\/p>\n [amp_mcq option1=”Leverage” option2=”Hurdle rate” option3=”Risk rate” option4=”Return rate” correct=”option2″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-57689","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\n\n