When the costs of an investment come before that investment's benefits, what will be the effect of a rise in interest rates on the attractiveness of that investment to potential investors?

Question

Quizplus · Accepted Answer

When costs come before benefits, a rise in interest rates will lead to a decrease in the investment's net present value (NPV) since the cost of borrowing money increases. Therefore, the investment will become less attractive to potential investors.

When the Costs of an Investment Come Before That Investment's