One of the strengths of using a hurdle rate to measure the performance of divisions in a diversified firm is that if the corporation has a single hurdle rate, there is little ambiguity about the performance objectives of divisions.

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A single hurdle rate provides a clear and consistent performance target for all divisions within a corporation, making it easier to measure and compare their performance. This reduces ambiguity and ensures that all divisions are working towards the same goal.

One of the Strengths of Using a Hurdle Rate to Measure