Table 92 -Refer to Table 9

Multiple Choice

Table 9.2
$$\begin{array} { | l c | } \hline \text { Cost of machine } & \$ 300,000 \\\hline \text { Arnual autput from mechine } & \$ 35,000 \\\hline \text { Arnual interett rate on loans } & 9 \% \\\hline\end{array}$$
-Refer to Table 9.2. If a firm purchases the machine by taking out a one-year loan, what happens to the firm's rate of return on the investment if the interest rate increases to 10 percent?

A) It increases to 1.5 percent
B) It increases to 0.15 percent
C) It decreases to 1.5 percent
D) It decreases to 1.7 percent
E) It decreases to 0.17 percent