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Q: What is the relationship between interest rates and business investment?
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Distinguish between nominal and real interest rates. Which is more relevant in making investment and R&D decisions?
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- What process does the net present value method use to help management determine whether a project is acceptable to a company? Options : A. It discounts net cash flows to their present value and then compares that value to the capital outlay required by the project.B. It determines the interest rate that will cause the present value of the capital expenditure to equal the present value of the expected net cash flows.C. It divides the present value of net cash flows by the initial investment to determine the profitability index of the project.D. It identifies the time period required to recover the cost of the capital investment from the net annual cash flow produced by the project.What role does depreciation rate and interest rate play in investment decisions? ExplainIt refers to an annual decrease in value of physical properties with passage of time and use O A. Annuity O B. Depreciation O C. Stock O D. Bond
- J Assume that at the beginning of the year, you purchase an investment for $14,200 that pays $95 annual income. Also assume the investment's value has increased to $15,800 by the end of the year. a. What is the rate of return for this investment? Note: Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places. Rate of return b. Is the rate of return a positive or a negative number? O Positive O NegativeMost investors would agree with the notion that they want to earn as much money on their investments as possible. a) List and explain the different investors that you may be aware of, and state and explain their investment objectives. b) For the investor groups/classes identified in (a) above, what possible constraints do they have to contend with or face in their investment decision making process. List and explain the investor constraints they face.Explain Decision Rule for Simple Investments?
- What is the break even investmentDistinguish between nominal and real interest rates. Which is more relevant in making investment and R&D decisions? If the nominal interest rate is 12 percent and the inflation rate is 8 percent, what is the real rate of interest?1. Why 0% interest would rebuild ERI (Economic Responsibility Investing) economies? ... [3 lines max]