Assume That If the Interest Rate That Businesses Must Pay

question 246

Multiple Choice

Assume that if the interest rate that businesses must pay to borrow funds were 20 percent, it would be unprofitable for businesses to invest in new machinery and equipment so that investment would be zero.But if the interest rate were 16 percent, businesses would find it profitable to invest $10 billion.If the interest rate were 12 percent, $20 billion would be invested.Assume that total investment continues to increase by $10 billion for each successive 4 percentage point decline in the interest rate.Refer to the above information.Which of the following correctly expresses the indicated relationship as an equation?

• A)i = 20 - 4I.
• B)i = 20 -.4I.
• C)i = 24 -.4I.
• D)i = 20 - 10I.

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Definitions:

Cost Effective

A term that describes a process, project, or expenditure that provides the best possible outcome or value for the money spent.

Training Needs

Identifications of gaps in skills, knowledge, and abilities among employees, determining what training is required to bridge these gaps for improved performance.

Double-Loop Learning

A learning concept where individuals not only make corrections based on mistakes but also examine and adapt the underlying governing values and policies.

Setbacks

Unforeseen challenges or obstacles that hinder progress or achievement of goals.