James Estimates His Rate of Return on an Investment to Be

question 68

Multiple Choice

James estimates his rate of return on an investment to be 6 percent. The market rate of interest is 7.5%. We know that:

• A) James should undertake the investment.
• B) James should not undertake the investment.
• C) James should be indifferent to the investment.
• D) James must first calculate costs and benefits before deciding whether or not to invest.

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