If the Firm in the Previous Question Finds It Can

question 110

Multiple Choice

If the firm in the previous question finds it can borrow funds at an interest rate of 10 percent the firm should:

• A) not purchase the machine because the expected rate of return exceeds the interest rate.
• B) purchase the machine because the expected rate of return exceeds the interest rate.
• C) not purchase the machine because the interest rate exceeds the expected rate of return.
• D) purchase the machine because the interest rate exceeds the expected rate of return.

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Definitions:

Duration

The total amount of time that something lasts or continues.

Direction

Guidance or instruction on how to proceed, or the course along which something moves.

Duration

The amount of time taken to complete an event or activity.

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