When Evaluating the Incremental Costs of Borrowing,if the Interest Rate

question 21

True/False

When evaluating the incremental costs of borrowing,if the interest rate is higher on the larger loan amount,the incremental cost of the additional funds borrowed tends to be lower than the rate on the larger loan.

---

Definitions:

Corporate Income Tax

A tax imposed on the net income (profit) of corporations, calculated at a corporate tax rate.

Capital Intensive Techniques

Production methods that require a higher investment in physical capital rather than labor.

Payroll Tax

Impositions required from employers or employees, consistently based on a proportion of the payment to laborers.