Which One of These Determines the Minimum Acceptable Rate of Return

question 91

Multiple Choice

Which one of these determines the minimum acceptable rate of return on a capital investment?

• A) The alternative investment opportunities available to investors
• B) The profit margin of the existing firm
• C) The rate of return on the firm's outstanding shares
• D) The rate of return on risk-free debt securities

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Definitions:

International Accounting Standards Board

An independent organization that establishes accounting standards known as International Financial Reporting Standards (IFRS) used globally.

Double Taxation

A taxation principle referring to income taxes paid twice on the same source of earned income, occurring typically with corporate dividends taxed at both the corporate and individual level.

Corporation

A legal entity that is separate and distinct from its owners, offering limited liability, ease of transferability of shares, and perpetual succession.

Partnership

A legal form of business operation between two or more individuals who share management and profits or losses.