If Economic Conditions Become Less Favorable, Then

question 39

Multiple Choice

If economic conditions become less favorable, then:

• A) expected cash flows on various projects will increase.
• B) more proposed projects will have expected returns greater than the hurdle rate.
• C) there would be additional acceptable business projects.
• D) there would be a decreased demand by business for loanable funds.

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Definitions:

Infinite

Without limit or end; often used in mathematics and physics to describe quantities or concepts that extend beyond any finite boundary or size.

Terms

Terms and conditions outlined within a contract or agreement.

Redeemed

The process of exchanging a financial instrument or coupon for its value in money or goods.

Inflation

The speed at which the overall price level of goods and services increases, leading to a decrease in buying power.