The interest rate is important to the investment decision
A)only when funds must be borrowed
B)only when firms have the money on hand
C)regardless of whether funds must be borrowed or firms have the funds on hand
D)only when the firm has funds on hand and is ready to lend them
E)only when the firm is purchasing new equipment rather than a new building

Question

Quizplus · Accepted Answer

The interest rate is an essential factor for investment decision-making regardless of whether the funds are borrowed or the firm has the funds on hand. It affects the cost of capital, which impacts the profitability of the investment. Therefore, it is essential to consider the interest rate when making investment decisions, regardless of the source of the funds or the type of investment.

The Interest Rate Is Important to the Investment Decision