Asked by Jessica Leigh on Jul 22, 2024
Verified
Refer to Table 11.1. If the interest rate is 20%, Nashbar Bicycle should
A) fund only the purchase of new tablet computers for its sales staff.
B) fund all of the projects except for the purchase of new tablet computers for its sales staff.
C) fund all of the projects.
D) not fund any of the projects.
Interest Rate
The percentage of a sum of money charged for its use, typically expressed as an annual percentage.
Total Investment
The total amount of money invested in assets, projects, or securities by individuals, companies, or governments.
Expected Rate
The Expected Rate often refers to the anticipated return or yield on an investment, savings, or any financial product over a specified period.
- Inspect the procedure for making choices about investments, with an eye on interest rates and anticipated financial gains.
Verified Answer
SP
sarani pavithraJul 27, 2024
Final Answer :
A
Explanation :
The correct choice is to fund only the purchase of new tablet computers for its sales staff because its expected rate of return (22%) is higher than the interest rate (20%), making it the only project with a positive net return.
Learning Objectives
- Inspect the procedure for making choices about investments, with an eye on interest rates and anticipated financial gains.