Which of the Following Would Encourage Greater Investment in Capital

question 48

Multiple Choice

Which of the following would encourage greater investment in capital?

• A) an increase in the corporate profits tax
• B) greater uncertainty regarding the rate of return
• C) an increase in the price of capital
• D) a reduction in the rate of interest
• E) an increase in the rate of depreciation or obsolescence

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Definitions:

Office Equipment

Refers to the assets purchased for use in the operation of a business, including computers, printers, and furniture.

Fixed Costs

Fixed expenses in a business are those outgoings that do not change with the amount of goods produced or sold, including costs like lease payments, wages, and repayments on borrowings.

Manufacturing Wages

Payments made to employees involved in the production process, reflecting labor costs in producing goods.

Statement of Comprehensive Income

A financial report that includes all changes in equity during a period except those resulting from investments by and distributions to owners.