The hurdle rate should be set so that it reflects the proper risk level for the project.If we have to choose between two projects with similar risk and therefore similar hurdle rates,we would select the project that ________.
A)has a higher internal rate of return
B)has a lower internal rate of return
C)has a hurdle rate that is consistent with the payback period method
D)has a hurdle rate that is consistent with the discounted payback period model

Question

Quizplus · Accepted Answer

When comparing projects with similar risk and hurdle rates, the project with a higher internal rate of return would be preferred as it would generate a higher return on investment. The hurdle rate is not necessarily related to the payback period or discounted payback period, but rather reflects the risk level and desired return for the project.

The Hurdle Rate Should Be Set So That It Reflects