The Project's Pre-Tax Minimum Rate of Return Must Equal Which

question 3

Multiple Choice

The project's pre-tax minimum rate of return must equal which of the following:

• A) Lender's interest - Shareholders' return
• B) Lender's interest + Shareholders' return
• C) Minimum cash flow x Investment
• D) Minimum cash flow ∕ Investment

---

Definitions:

Freehold Estate

A type of real property ownership where the owner has indefinite duration of ownership rights, including the land and buildings.

Life Estate

A property interest that lasts for the lifetime of a specific individual, after which the property passes to another recipient.

Joint Tenancy

A form of property co-ownership that provides each tenant with an equal share and rights in the property, with the provision of right of survivorship.

Enforceable

A quality of law or agreement that allows it to be legally imposed or acted upon, ensuring compliance.