When the Costs of an Investment Come Before That Investment's

question 42

Multiple Choice

When the costs of an investment come before that investment's benefits,what will be the the effect of a rise in interest rates on the attractiveness of that investment to potential investors?

• A)It will make it more attractive,since it will increase the investment's net present value (NPV).
• B)It will make it more attractive,since it will decrease the investment's net present value (NPV).
• C)It will make it less attractive,since it will increase the investment's net present value (NPV).
• D)It will make it less attractive,since it will decrease the investment's net present value (NPV).

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Definitions:

Foreign Firm

A company that is based in one country while conducting business operations in one or more other countries.

Free Trade

An economic policy that allows imports and exports among countries with minimal or no tariffs, quotas, or other restrictions.

Chinese Product

Products manufactured in China, often highlighted in discussions about global trade, manufacturing practices, and economic policies.

American Manufacturers

Companies based in the United States that produce and sell goods within the country and/or internationally.