Question

Please define how to detrmin Hurdle rate.

Answer #1

A hurdle rate is the minimum rate of return which is required on a project in which the company is investing.

We can also call it as MARR, Minimum Acceptable Rate of Return.

Most of the organisation use Weighted average cost of capital (WACC), as a hurdle rate for investment evaluation purpose. The formula for WACC is = Cost of equity + Cost of debt (1-Tax rate).

As WACC is the required rate of return which investors demand from the company, so the company also wants the same rate from the investment project.

Define the relationship between hurdle rate and IRR and
NPV.

Which of the following is a legitimate reason for firms to use a
hurdle rate rather than an estimated WACC to evaluate projects?
Question 9 options:
A) To more closely represent true opportunity costs for a firm
that has to reject positive-NPV projects due to financial
constraints.
b) To provide a safety margin in case of estimation error in the
WACC.
C) Both of the above reasons are valid.
D) Firms only use a hurdle rate different from the WACC...

The hurdles to implementing EHR, how you would overcome that
hurdle, or if it is invalid.

How would you define a manager?
How would you define an organization?
Please cite your sources.
Give an example of a strong manager and an
organization that you worked with in the past or presently.

Which of the following is another name for hurdle rate?
A. Weighted average cost of capital
B) cost of doing business
C) NPV
D) IRR

Please explain and define osmosis.
How does osmosis relate to global warming?

Please explain and define distillation.
How does distillation relate to global warming?

(A) Please calculate the Weighted Average Cost of Capital (WACC)
for the following company. Assumptions:
Risk free rate = 4.0%
Company’s spread = 2.0%
Expected return of the market = 9.0%
Company Beta = 1.10
Company debt to capitalization ratio = 40%
Company tax rate = 30%.
(Please be sure to show your calculations.) (B) Please define
and explain the Hurdle Rate. (3 points)

Given an initial investment of $10,000, a hurdle rate of 11% and
the following cash flows, find the IRR: Year 1
$2,500 Year 2
$2,500 Year 3 $3,000 Year
4 $3,000 Year 5
$3,500
Based on the IRR in question 8, is it worth the $10,000
investment? Why or why not?

A company's hurdle rate is generally influenced by: Select one:
a. whether management uses the net-present-value method or the
internal-rate-of-return method. b. project risk. c. Both the cost
of capital and project risk. d. the cost of capital. e. the firm's
depreciable assets.

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