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For capital budgeting process management would select high hurdle rate of return for certain projects because management?

a. wants to use equity funding exclusively. b. Believes too many proposals are being rejected. c. Believes bank loans are riskier than capital investments. d. Wants to factor risk into its consideration of projects.

Budgetary
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Question added by SREEDEVI SUNILKUMAR , Business finance officer , Emirates Airline
Date Posted: 2014/04/01
Upvote (1) Views (7) Followers (4) Answers (5) Report Question
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RAMAN NAMPOOTHIRI
by RAMAN NAMPOOTHIRI , Dubai, UAE as Audit Manager , Paul & Hassan Chartered Accountants

Agree with answer given by Mr. Venkata Raman and Vinod Jetely

Vinod Jetley
by Vinod Jetley , Assistant General Manager , State Bank of India

d. Wants to factor risk into its consideration of projects.

Ibrahim Hussein Mayaleh
by Ibrahim Hussein Mayaleh , Sales & Business Consultant and Trainer , Self-employed

Thanks for the invitation, but I really don't know. I leave it to the experts.

VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

Answer option (d) >>>>>>>>>  Wants to factor risk into its consideration of projects.

 

'Hurdle Rate' :The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, the riskier the project, the higher the hurdle rate

Divyesh Patel
by Divyesh Patel , Assistant Professional Officer- Treasury , City Of Cape Town

Option D

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