The appropriate hurdle rate for a particular project reflects the perceived riskiness of the project.

Question

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The hurdle rate is the minimum rate of return that a company requires before making an investment. It reflects the perceived riskiness of the project because riskier projects require higher rates of return to compensate for the increased risk. Therefore, the appropriate hurdle rate for a particular project should be based on its perceived riskiness.

The Appropriate Hurdle Rate for a Particular Project Reflects the Perceived