If the Marginal Rate of Return Expected from a Purchase

Multiple Choice

If the marginal rate of return expected from a purchase of equipment is greater than the market interest rate, the firm should

A) not purchase the equipment
B) purchase the equipment
C) either purchase or not purchase the equipment, depending on the marginal resource cost
D) inform stockholders that the company expects a decrease in earnings from the purchase
E) seek government assistance in raising market interest rates