1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
irakobra [83]
3 years ago
6

Answer the question on the basis of the following information. Assume that if the interest rate that businesses must pay to borr

ow funds were 20 percent. It would be unprofitable for businesses to invest in new machinery and equipment, so investment would be zero. But if the interest rate were 16 percent, businesses would find it profitable to invest $10 billion. If the interest rate were 12 percent. $20 billion would be invested. Assume that total investment continues to increase by $10 billion for each successive 4 percentage point decline in the interest rate. Refer to the information. Which of the following is an accurate verbal statement of the described relationship?
a. There is no regular or dependable relationship between business investment and the interest rate
b. The amount of business investment is unaffected by changes in the interest rate
c. Investment spending by businesses varies inversely with the interest rate.
d. Investment spending by businesses varies directly with the interest rate.
Business
1 answer:
Kay [80]3 years ago
7 0

Answer:

The answer is: C) Investment spending by businesses varies inversely with the interest rate.

Explanation:

This statement is true all the time. When a company evaluates the costs and benefits of an investment, interest rate plays a fundamental part in those calculations. The two basic reasons for that are:

  1. The higher the interest rate a company (or any individual) has to pay for a loan, the harder it is for the company to repay the loan.
  2. The interest rate a bank charges is usually correlated to the opportunity cost of an investment. The higher the interest rates banks charge, the higher the internal rate of return (which is used to calculate the Net Present Value of an investment) will be. This is because banks don´t print money, they take in deposits and then they loan the money the someone else. So if the interest rate the bank charges is high, usually the interest rates the bank pays for the deposits is also high. Instead of investing, a company might just put their money on the bank and earn a better return rate.  
You might be interested in
Every Monday during the month of December, salespeople who had the highest sales the previous week participated in a package sur
VARVARA [1.3K]

Answer:

Sales contest.

Explanation:

In this scenario, every monday during the month of December, salespeople who had the highest sales the previous week participated in a package surprise, where each would receive a package containing either a $50 or a $100 bill. This short-term incentive is known as a sales contest.

A sales contest can be defined as a short-term incentive program developed or created by a business entity to motivate its sales personnels in order to achieve specific sales objectives and targets.

<em>Basically, it is mainly competitive so as to motivate and stimulate salespeople to meet set objectives, goals and targets by duly rewarding with prizes. </em>

7 0
3 years ago
Which of the following statements are TRUE about credit scores?
Elina [12.6K]
They affect your life
3 0
3 years ago
Read 2 more answers
What are the advancements made in the automotive industry in 2020
Nata [24]

Answer:

Autonomous Vehicles (AV)

Connectivity

Electrification

Shared Mobility

Artificial Intelligence (AI)

Big Data & Data Analytics

Human-Machine Interface

Blockchain

Explanation:

6 0
3 years ago
Read 2 more answers
Which of the following statements is/are FALSE, all else the same?
xz_007 [3.2K]

Answer:

I. Present values increase as the discount rate increases.

and

III. Present values are smaller than future values when both r and t are positive.

5 0
3 years ago
Jahwana works for a large corporation with a 401(k) retirement plan. The company matches dollar for dollar the first 5% of the e
Gre4nikov [31]

Answer:

$8,000

Explanation:

Jahwana earns $40,000:

her 401k contributions = 15% x $40,000 = $6,000

Jahwana's employer contributes $1 per $1 that she contributes but only up to 5%, so her employee's 401k contribution = 5% x $40,000 = $2,000

total annual contribution = $6,000 + $2,000 = $8,000

7 0
3 years ago
Read 2 more answers
Other questions:
  • DeLong Corporation was organized on January 1, 2017. It is authorized to issue 10,000 shares of 8%, $100 par value preferred sto
    9·1 answer
  • Do you think that modern society has contributed to the number of youth suicides? Why or why not?
    12·2 answers
  • Suppose that the market demand for 32-oz. wide mouth Nalgene bottles is Q = 50,000p^-1.076, where Q is the quantity of bottles p
    9·1 answer
  • Income is generated through the ______ of goods and services. In the United States, ________ of all income takes the form of wag
    5·1 answer
  • Errol works for Food Packing Company. Errol’s supervisor Gwen writes a negative review of Errol’s performance. Gwen believes the
    6·1 answer
  • (Disregard income taxes in this problem.) Compute the following:a.An investment of $10,000 has an investment/inflow ratio of 6.2
    9·1 answer
  • A firm wants to strengthen its financial position. Which of the following actions would INCREASE its quick ratio?a) Offer price
    5·1 answer
  • 500 divided by 2/3 = 500 * blank = blank feet <br><br><br>please help me
    13·1 answer
  • What term describes a ban or restriction on trade with another country?
    10·2 answers
  • All of the following are true about health insurance except:
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!