If a business makes the determination that an investment makes sense at the current interest rate but before they can act the interest rates rises
A)they will have to recalculate whether it still makes sense.
B)it will only make the situation better so they will clearly make the investment.
C)it will cause them to not make the investment regardless of the increase.
D)they will go ahead with the investment because interest rates have nothing to do with whether an investment makes sense.

Question

Quizplus · Accepted Answer

An increase in interest rates would mean a higher cost of borrowing and therefore could affect the return on investment. The business will have to recalculate whether the investment still makes sense at the higher interest rate.

If a Business Makes the Determination That an Investment Makes