The rate of return on investment is the main determinant of investment spending.

Question

Quizplus · Accepted Answer

The rate of return on investment, which measures the profitability of an investment, is a crucial factor in determining whether a company will invest in a new project or not. If the expected rate of return is high enough to justify the cost of the investment, then the company is likely to invest. Therefore, the rate of return is a key determinant of investment spending.

The Rate of Return on Investment Is the Main Determinant