Joe’s Build Back Better (BBB) Ammo Corp has$15 million in cash, which it has accumulated from retained earnings. It was planning to use the money to build a new factory. Recently, the interest rate has increased. How does this influence the company's decision, assuming the alternative to investing in a factory is loaning the money out? (A)It doesn’t, since the company’s shareholders are expecting a new factory. (B)It is more likely to build the factory because a higher interest rate makes the factory more valuable. (C)It is less likely to build the factory, since the opportunity cost of using the funds to build a factory rises with a higher interest rate. (D)It doesn’t influence their decision, since the company does not need to borrow money to build the factory.
Joe’s Build Back Better (BBB) Ammo Corp has$15 million in cash, which it has accumulated from
(A)It doesn’t, since the company’s shareholders are expecting a new factory.
(B)It is more likely to build the factory because a higher interest rate makes the factory more valuable.
(C)It is less likely to build the factory, since the
(D)It doesn’t influence their decision, since the company does not need to borrow money to build the factory.
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