The rate of return k is also referred to as the
A)discount rate.
B)hurdle rate.
C)opportunity cost of capital.
D)all of the above

Question

Quizplus · Accepted Answer

The rate of return k can be referred to by any of these terms, so all of the choices are correct. The discount rate refers to the rate at which future cash flows are discounted to their present values. The hurdle rate is the minimum rate of return required by an investor or company before any investment or project is undertaken. The opportunity cost of capital is the rate of return that could have been earned on an alternative investment with similar risk. Therefore, all of these terms are used interchangeably for the rate of return k.

The Rate of Return K Is Also Referred to as the