Multiple Choice
The owners of the Morning Glory Coffee Shop are considering spending $3,000 on a new cappuccino machine.They expect to increase revenues by $200 per year if they do.The current interest rate is 8 percent.Which of the following is true?
A) The rate of return on their investment is $200.
B) The rate of return on their investment is 5 percent.
C) The owners should not buy the machine.
D) The owners should buy the cappuccino machine if they have the $3,000 in cash,but not if they have to borrow the money.
E) The owners should buy the cappuccino machine regardless of whether they have the $3,000 in cash or not.
Correct Answer:
Verified
Correct Answer:
Verified
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