The Hurdle Rate That Is Used in a Net-Present-Value Analysis

question 99

Multiple Choice

The hurdle rate that is used in a net-present-value analysis is the same as the firm's:

• A) discount rate.
• B) internal rate of return.
• C) minimum desired rate of return.
• D) objective rate of return.
• E) discount rate and minimum desired rate of return.

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Definitions:

Market Price

The present trading value for assets or services within the scope of a commercial market.

Shares Of Stock

Units of ownership interest in a corporation or financial asset, giving shareholders a proportion of the corporation's assets and profits.

Profit Margin

A financial metric representing the percentage of revenue that remains as profit after all expenses are deducted.

Return On Assets

A measure of how effectively a company uses its assets to generate profit, calculated as net income divided by average total assets.