If an Investment Project Costing $2,800 Was Expected to Yield

question 96

Multiple Choice

If an investment project costing $2,800 was expected to yield $1,000 (to be received at year end) for each of the next three years, a profit-maximizing entrepreneur would

• A) definitely undertake the project.
• B) never undertake the project.
• C) undertake the project if the interest rate was low enough.
• D) undertake the project if the interest rate exceeded 12 percent.