Misaki Is Considering Three Options That Her Company Has for Investment

question 49

Multiple Choice

Misaki is considering three options that her company has for investment in capital. The internal rate of return for option A is 4%, for option B is 6%, and for option C is 8%. If the interest rate on borrowed funds is 5%, what would an economist recommend that Misaki do?

• A) Consider investing in option A only.
• B) Consider investing in option B and
• C) Consider all three options as equally worthy of consideration.
• D) Invest in none of the options.

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Definitions:

Endometrium

Mucous membrane composing the inner layer of the uterine wall; consists of a simple columnar epithelium and a lamina propria that contains simple tubular uterine glands.

Germ Layers

The three primary layers of cells (ectoderm, mesoderm, and endoderm) in the early embryo, from which all tissues and organs develop.

Cardiovascular

Relating to the heart and blood vessels, encompassing the entire circulatory system.

Ectoderm

The outermost layer of cells or tissue of an embryo in early development, giving rise to the skin and nervous system.