The term hurdle rate is often used in the context of project evaluation and is sometimes used

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The term hurdle rate is often used in the context of project evaluation and is sometimes used to refer to the risk-adjusted discount rate—i.e., the required rate of return on a project with a given level of risk. The risk adjusted discount rate refers to the cost of capital or opportunity cost of raising money to finance an in-vestment, and hurdle rates are generally higher than the cost of capital. Why might a firm use hurdle rates that exceed its cost of capital?
Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...
Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...
Opportunity Cost
Opportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...
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