When the Costs of an Investment Come Before That Investment's

question 24

Multiple Choice

When the costs of an investment come before that investment's benefits, what will be the effect of a rise in interest rates on the attractiveness of that investment to potential investors?

• A) It will make it more attractive, since it will increase the investment's net present value (NPV).
• B) It will make it less attractive, since it will increase the investment's net present value (NPV).
• C) It will make it more attractive, since it will decrease the investment's net present value (NPV).
• D) It will make it less attractive, since it will decrease the investment's net present value (NPV).

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