Greg's Tasty Ice Cream Is Considering Building a New Ice

Multiple Choice

Greg's Tasty Ice Cream is considering building a new ice cream factory that costs $8.3 million.The company accountants believe that,not accounting for interest costs,building the factory will increase profits by $5 million the first year,$4 million the second year and have no value thereafter.Greg's Tasty Ice Cream should build the factory if the interest rate is

A) 3% but not if it is 4%.
B) 4% but not if it is 5%.
C) 5% but not if it is 6%.
D) 6% but not if it is 7%.