Investment in a Project Will Take Place If the

question 58

Multiple Choice

Investment in a project will take place if the

• A) marginal propensity to save exceeds the marginal propensity to consume.
• B) expected rate of return exceeds the interest rate.
• C) interest rate exceeds the marginal propensity to save.
• D) net investment in the economy exceeds gross investment.
• E) multiplier exceeds the expected rate of return.

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Definitions:

Required Return

The minimum annual percentage earned by an investment that will induce individuals or companies to put their money into a particular project or investment.

Small Stock Dividend

A dividend paid in the form of additional shares, typically representing less than a 25% increase in outstanding shares.

Capital In Excess

Funds received by a company from issuing shares that exceed the par value of the shares.

Debt-Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets, often used to assess the company's financial leverage.