If a Firm Wants to Borrow $10 Million and the Real

question 47

Multiple Choice

If a firm wants to borrow $10 million and the real interest rate increases from 5 per cent to 6 per cent, then the cost of the investment has increased by

• A) $6 million per year.
• B) $600,000 per year.
• C) $100,000 per year.
• D) $1 million per year.
• E) nothing because the real interest rate is the return the firm will earn on its investment.

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Definitions:

Ethical Problems

Challenges in determining what is right or wrong in various situations, often involving moral dilemmas.

Obligations

Duties or commitments that one is bound to fulfill by moral or legal constraints.

Rehabilitate

The act of restoring someone or something to a condition of health or constructive activity through therapeutic interventions.

Voting Rights

The entitlements individuals have to participate in the electoral process, often focusing on issues of accessibility and disenfranchisement.