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If a Firm Can Borrow or Lend at a 6

Question 65

Multiple Choice

If a firm can borrow or lend at a 6 percent annual interest rate, it will


A) buy more capital if it has the funds on hand than if it has to borrow them
B) ignore the market rate of interest when making capital investment decisions
C) buy less capital if it has the funds on hand than if it has to borrow them
D) ignore the market rate of interest when making saving decisions
E) buy the same amount of capital whether it has the funds on hand or has to borrow them

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