Which of the following three statements is true: I) The amount of capital equipment a firm wishes to buy depends on the rate of interest; II) The amount of capital equipment a firm wishes to buy depends on the purchase price of capital; III) The amount of capital equipment a firm wishes to buy depends on the rates of technological and physical depreciation.

Question

Quizplus · Accepted Answer

All three statements are true because the amount of capital equipment a firm wishes to buy is influenced by the rate of interest (affecting the cost of financing), the purchase price of capital (affecting the initial investment cost), and the rates of technological and physical depreciation (affecting the long-term value and efficiency of the equipment).

Which of the Following Three Statements Is True: I) the Amount