The Minimum Acceptable Expected Rate of Return on a Project

question 74

Multiple Choice

The minimum acceptable expected rate of return on a project of a specific risk is the:

• A) project cost of capital.
• B) company cost of capital.
• C) risk-free rate of return.
• D) project beta times market risk premium.

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Definitions:

Production Tax

A tax imposed by governments on the production, sale, or use of goods and services within their jurisdiction.

Supply Curve

a graph showing the relationship between the price of a good and the quantity of the good that suppliers are willing and able to supply.

Equilibrium Price

The market price at which the quantity of a good supplied equals the quantity demanded, resulting in market balance.

Buyers

Individuals or organizations that purchase goods or services for personal use or for resale.