Suppose That, When the Price of Steel Drops, Steel Companies

Multiple Choice

Suppose that, when the price of steel drops, steel companies tend to cut back on investment in their non- steel activities more than other firms in these same non- steel activities. This would support the idea that:

A) business firms do not care about interest rates.
B) cash flow does not matter for investment.
C) business firms do not care about profit.
D) business firms do not use discounting.
E) cash flow matters for investment.