The Hurdle Rate Is Often Set At

question 175

Multiple Choice

The hurdle rate is often set at:

• A) The rate the company could earn if the investment were placed in the bank.
• B) The rate at which the company is taxed on income.
• C) The company's cost of capital.
• D) 10% above the ARR of current projects.
• E) 10% above the IRR of current projects.

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Definitions:

Crown Gears

A type of gear with teeth projecting at right angles to the plane of the wheel, allowing for angular transmission of torque, often used in differentials.

Pinion

A smaller, usually stub-shaped gear used to drive a larger gear in an arrangement such as crown and pinion gearing in final drive carriers or the starter motor pinion that engages with the flywheel ring gear.

Tandem Drive Axle

A configuration in heavy-duty vehicles where two drive axles are placed in close proximity to distribute the load more evenly across the wheels.

Power Divider

A component in vehicle drivetrains, particularly in heavy trucks, used to distribute power evenly across multiple axles.