For projects financed from borrowed funds,the hurdle rate must exceed the interest rate paid on these funds.

Question

Quizplus · Accepted Answer

The hurdle rate of a project represents the minimum rate of return that must be achieved in order for the project to be considered successful. This rate must exceed the interest rate paid on borrowed funds in order to ensure that the project generates a return greater than the cost of financing it. Therefore, option A is correct.

For Projects Financed from Borrowed Funds,the Hurdle Rate Must Exceed