If the rate of return is lower than the cost of borrowing the:
A. borrower will make money by taking out the loan.
B. investor will lose money on net after paying back the loan.
C. savers will lose out by taking a loan.
D. investor should take out the loan.
Answer: B
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If a firm goes bankrupt, the bondholders will get paid back before the stockholders get any money.
Answer the following statement true (T) or false (F)
The city of Austin can buy roads or light rail. If 10 miles of roads cost $1 million and 2 miles of light rail cost $10 million, what is the city's opportunity cost of 1000 miles of roads?
a. $100 million b. 2 miles of light rail c. 200 miles of light rail d. $50 million e. $1,000 million
___________ is the study of the determination of an equilibrium price and quantity in a given product or input market that is self-constrained and independent of other markets
Fill in the blank(s) with the appropriate word(s).
Figure 15.2 depicts a one-mile stretch of beach with 100 swimmers distributed evenly along the beach. There are two ice cream vendors - 1 and 2 - on the beach selling an identical product. Assume that each swimmer buys only one ice cream cone and that they prefer to buy ice cream from the nearer vendor. If neither vendor has an incentive to adjust their locations:
A. vendor 1 is at B while vendor 2 is at D. B. vendor 1 is at A while vendor 2 is at C. C. vendor 1 is at A while vendor 2 is at D. D. both vendors are at C.