A minimum acceptable rate of return for an investment decision is called the:
A)Internal rate of return.
B)Average rate of return.
C)Hurdle rate of return.
D)Maximum rate of return.
E)Payback rate of return.

Question

Quizplus · Accepted Answer

The minimum acceptable rate of return for an investment decision is called the hurdle rate of return. It is the rate of return that an investment must meet in order to be considered worthwhile. The internal rate of return and average rate of return are measures of profitability and do not necessarily reflect the minimum acceptable rate. The maximum rate of return and payback rate of return are not commonly used to evaluate investment decisions.

A Minimum Acceptable Rate of Return for an Investment Decision