The minimum acceptable expected rate of return on a project is the:
A) project cost of capital.
B) company cost of capital.
C) risk-free rate of return.
D) project beta times the market risk premium.

Question

Quizplus · Accepted Answer

The minimum acceptable expected rate of return on a project is known as the project cost of capital. This is the cost of the funds required to finance the project and is used as a benchmark to evaluate the project's potential profitability. It represents the minimum rate of return that an investor would require to fund the project. Therefore, the best answer is A, project cost of capital.

The Minimum Acceptable Expected Rate of Return on a Project