The Hurdle Rate Approach in Determining the Acceptability of Projects

question 13

Multiple Choice

The hurdle rate approach in determining the acceptability of projects:

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

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