Final answer:
The term that represents the minimum rate of return FisherCo will accept on a new project is the cost of capital, which includes both the cost of debt and equity and reflects the risk of the investment.
Step-by-step explanation:
The cost of capital is the firm's required return, necessary to make a capital budgeting project, such as building a new factory, worthwhile. The cost of capital includes the cost of debt and the cost of equity and is influenced by the risk associated with the investment. Firms intend to earn at least this return on their investments to ensure they are compensating the investors for the risk taken. The expected rate of return is not necessarily the minimum acceptable; rather, it is a forecast of future profits. Internal rate of return (IRR) is a metric used to evaluate the profitability of potential investments but isn't a minimum requirement. The market rate of return refers to the return provided by the market, where one could potentially invest instead of undertaking the project. Firms typically need to earn a return at least equal to the cost of capital to justify proceeding with an investment.