The hurdle rate should reect the riskiness of the investment and the
mix of debt and equity used to fund it.
should reect the magnitude and the timing of the
cashows as welll as all side effects.
The optimal mix of debt and equity maximizes rm
The Investment Decision Invest in assets that earn a return greater
than the minimum acceptable hurdle rate
The Financing Decision Find the right kind of debt for your rm and
the right mix of debt a