The __________ is the interest rate set by an organization as the minimum acceptable rate of return for a project.
A)hurdle rate
B)acceptable rate
C)internal rate of return
D)net present value

Question

Quizplus · Accepted Answer

Hurdle rate is defined as the minimum rate of return that an organization expects to earn on an investment. It is the benchmark rate that managers use to assess the viability of a project. Any project that generates a return equal to or above the hurdle rate is deemed acceptable, while those that generate returns below the hurdle rate are rejected. The hurdle rate can be based on a variety of factors such as the company's cost of capital, inflation, risk premium, and market conditions. Therefore, the correct option is A) hurdle rate.

The __________ Is the Interest Rate Set by an Organization