Suppose the Kwik Print Company considers an investment project that involves the purchase of a copier with an expected output of $4, 000.If the firm has to borrow $3, 000 and the rate of return is 11.1 percent, then the interest rate associated with the loan must be 20 percent.

Question

Quizplus · Accepted Answer

The interest rate associated with the loan must be greater than the rate of return on the investment in order for the project to be profitable.

Suppose the Kwik Print Company Considers an Investment Project That