Joe's Taco Hut can purchase a delivery truck for $20,000 and Joe estimates it will generate a net income (after taxes, maintenance and operating costs) of $2,000 per year. He has no other opportunities. He should:
A) purchase the truck only if the real interest rate is less than 2 percent.
B) not purchase the truck if the real interest rate is greater than 2 percent.
C) purchase the truck if the real interest rate is greater than 10 percent.
D) purchase the truck if the real interest rate is less than 10 percent.
Correct Answer:
Verified
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