When would a company use the multiple hurdle strategy?

A company would use the multiple hurdle strategy when it seeks to optimize its investment decisions by applying various criteria or benchmarks to filter potential projects or investments. This approach helps in assessing opportunities through multiple stages, ensuring that only those that meet all specified hurdles advance. It is particularly useful in capital-intensive industries or in scenariOS with high uncertainty, where thorough evaluation is crucial for minimizing risks and maximizing returns. Overall, this strategy enhances decision-making by providing a structured framework for analyzing different investment options.