Which One of the Following Would Not Be Expected to Affect

question 53

Multiple Choice

Which one of the following would not be expected to affect the decision of whether to undertake an investment?

• A) Income tax rates
• B) Estimates of future inflation rates
• C) Sales reductions in other products caused by this investment
• D) Cost of the feasibility study that was conducted for this project

---

Definitions:

Returns on Stock Investments

The gain or loss made on stock investments, typically expressed as a percentage of the investment's initial cost.

Inflationary Pressures

Situations or factors that lead to an overall increase in prices, reducing purchasing power in an economy.

Interest Rates

This represents the cost, in percentage terms of the principal, that a borrower incurs from a lender to utilize their assets.

Maturity Risk

The risk of loss to an investor from changes in the price of a bond that arise from changes in the market interest rate. Also called price risk and interest rate risk. The term maturity risk emphasizes the fact that interest-induced price changes are larger with longer maturities.