Which of the Following Is a Weakness of Using a Hurdle

question 29

Multiple Choice

Which of the following is a weakness of using a hurdle rate as a standard of evaluating the performance of a division?

• A) The process is time-consuming.
• B) The process is fraught with political intrigue.
• C) This approach lets other firms determine what is and what is not excellent performance for a division within a diversified firm.
• D) The use of such a single standard ignores important differences in performance that might exist across divisions.

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The systematic allocation of the depreciated cost of an asset over its useful life.

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The ratio of variable costs to sales, used to assess how costs change in relation to changes in a business's sales volume.