Multiple Choice
Suppose that a firm has an opportunity to invest $100,000 in a project that over its one year life is likely to yield $115,000 in revenue.To maximize its return on investment the firm should:
A) finance the investment through borrowed funds if the interest rate is 25 percent or less.
B) finance the investment out of retained earnings if the interest rate is less than 15 percent.
C) borrow funds to finance the investment if the interest rate is 15 percent or less.
D) borrow funds to finance the investment as the present value of money is higher than the future value.
Correct Answer:
Verified
Correct Answer:
Verified
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