Fred's Fish House is contemplating an investment of $50,000 in new shrimp boats and deep fryers. Management of this company predict a 10.8 percent annual return on this investment. The current market rate of interest is 10.3 percent. Fred's Fish House will O A. make the investment since the cost is less than the expected return. ⒸB. not make the investment since the cost is less than the expected return. O C. make the investment since the cost is greater than the expected return. O D. not make the investment since the cost is greater than the expected return. At which of the market rates of interest below would Fred's Fish House be inclined to make the investment?
Fred's Fish House is contemplating an investment of $50,000 in new shrimp boats and deep fryers. Management of this company predict a 10.8 percent annual return on this investment. The current market rate of interest is 10.3 percent. Fred's Fish House will O A. make the investment since the cost is less than the expected return. ⒸB. not make the investment since the cost is less than the expected return. O C. make the investment since the cost is greater than the expected return. O D. not make the investment since the cost is greater than the expected return. At which of the market rates of interest below would Fred's Fish House be inclined to make the investment?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Fred's Fish House is contemplating an investment of $50,000 in new shrimp boats and deep fryers.
Management of this company predict a 10.8 percent annual return on this investment.
The current market rate of interest is 10.3 percent. Fred's Fish House will
A. make the investment since the cost is less than the expected return.
B. not make the investment since the cost is less than the expected return.
C. make the investment since the cost is greater than the expected return.
D. not make the investment since the cost is greater than the expected return.
At which of the market rates of interest below would Fred's Fish House be inclined to make the investment?
A. 3%.
B. 3.5%.
C. 2%.
D. at any of these interest rates listed.
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