As a financial analyst, you are tasked with evaluating a capital-budgeting project. You were instructed to use the IRR method, and you need to determine an appropriate hurdle rate. The risk-free rate is 4%, and the expected market rate of return is 11%. Your company has a beta of 0.75, and the project that you are evaluating is considered to have risk equal to the average project that the company has accepted in the past. According to CAPM, the appropriate hurdle rate would be Group of answer choices 9.25%. 0.75%. 15%. 11%. 4%.

9.25%

Explanation:

The Capital Asset Pricing Model (CAPM) can be used to find the expected return of a project which is another term for the hurdle rate. This can then be used in the IRR method.

Formula is;

Hurdle Rate = Risk free rate + Beta( Market rate of return - risk free rate)

Hurdle Rate = 4% + 0.75( 11% - 4%)

Hurdle Rate = 4% + 5.25%

Hurdle Rate = 9.25%

step 1: create a plan

step 2: inventory facility equipment/assets

step 3: create preventive maintenance procedures

step 4: create preventive maintenance schedules

step 5: train your maintenanceteam

step 6: analyze – adjust - improve

or

step 1 – pm procedure design: doing the effective things

step 2 – pm procedure scheduling: efficient use of people and resources

step 3 – pm lubrication engineering

step 4 – pm training: back on the chain gang

step 5 – pm program management plan

step 6 – communicate, communicate, communicate

a

explanation: