A company using a discount rate of 8% is likely trying to achieve what outcome?

Using a discount rate of 8% typically indicates that the company is engaging in the process of capital budgeting, where it assesses the viability of investment projects. The discount rate is a critical component in discounted cash flow analysis, which helps in determining the present value of expected future cash flows generated by an investment.

By applying this rate, the company is effectively evaluating whether the returns on its investment will meet or exceed this set benchmark of 8%. This decision-making approach allows the company to compare potential projects and allocate resources toward those that are likely to generate the best possible returns, ensuring that investments align with overall financial strategy and risk tolerance.

In contrast, other options relate to different financial strategies. Lowering tax liability typically involves tax planning strategies rather than direct project evaluation. Enhancing cash reserves may be a broader financial goal rather than directly assessing specific investments. Increasing debt levels involves financing strategies that do not necessarily correlate with the assessment of individual investment projects. Thus, the application of a discount rate is primarily associated with estimating the viability of investment projects.