1. Why might a risk-adjusted hurdle rate be necessary?
a) It will always reduce the hurdle rate
b) It will help keep manufacturing costs low
c) It is not appropriate to us the corporate hurdle rate for projects of different risk
d) It maximizes the return on investment
e) It will always increase the hurdle rate
2. A standard means of expressing a company’s cost of capital is which of the following?
a) Standard capital cost
b) Total capital cost
c) Capital weights
d) Cost return average
e) Weighted average cost of capital
3. There are several elements of ?nancial-structure design. Which of the following is not one of the elements?
a) Internal assessment
b) Exotica
c) Currency
d) Maturity structure of the ?rm’s capital
e) Mix of classes of capital