A firm's decision to invest in a project is based on the
A) real interest rate and expected total revenue.
B) nominal interest rate and expected total revenue.
C) nominal interest rate and the expected profit.
D) real interest rate and the expected profit.

Question

Quizplus · Accepted Answer

The decision to invest in a project is typically based on the real interest rate, which reflects the cost of borrowing after adjusting for inflation, and the expected profit, which is the anticipated financial gain from the project after accounting for costs.

A Firm's Decision to Invest in a Project Is Based