The Minimum Rate of Return Is Also Known as

question 7

Multiple Choice

The minimum rate of return is also known as

• A) hurdle rate
• B) payback period
• C) net present value
• D) cost of debt

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Definitions:

Account

A document detailing all the transactions related to a particular element within the accounting equation.

Ordinary Annuity

Invariable payments issued at the terminal of consecutive intervals over an exact length of existence.

Nominal Interest

The rate of interest before adjustments for inflation, as opposed to real interest rates which are adjusted.

Effective Rate

The actual annual interest rate that is earned or paid on an investment, taking compounding into account.