The ____ is the return that must be earned on invested funds to cover the cost of financing such investments
A) cost of capital
B) opportunity cost rate
C) required rate of return
D) All of the above.

Question

Quizplus · Accepted Answer

All the options provided represent different ways to describe the return that must be earned on invested funds to cover the cost of financing those investments. The cost of capital refers to the return a company needs to generate to cover the cost of its financing sources. The opportunity cost rate is the return foregone by investing in a specific project instead of the next best alternative. The required rate of return is the minimum return an investor expects to achieve by investing in a particular asset, taking into account its risk level. All these concepts relate to the return needed to justify the investment considering its financing costs.

The ____ Is the Return That Must Be Earned on Invested