The Hurdle Rate Approach in Determining the Acceptability of Projects

question 38

Multiple Choice

The hurdle rate approach in determining the acceptability of projects is _____.

• A) an improvement over the risk-adjusted discount rate approach because it provides for an objective basis to determine risk premiums for individual projects
• B) a modification of the internal rate of return approach
• C) inconsistent with the principle of project risk balancing
• D) a method used with the certainty equivalent approach

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Definitions:

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Stress

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