The hurdle rate for capital budgeting decisions is:
A) The cost of capital
B) The cost of debt
C) The cost of equity
D) All of the above

Question

Quizplus · Accepted Answer

The hurdle rate is the minimum rate of return that a project must earn in order to be considered viable. The cost of capital is the most appropriate measure of the hurdle rate as it is the weighted average of the cost of debt and the cost of equity, reflecting the overall cost of financing a company's operations.

The Hurdle Rate for Capital Budgeting Decisions Is