When interest rates rise, what needs to happen in order for the present value of an asset to remain the same, using a rate of return approach? a) The amount of the income stream needs to fall and/or cost of capital needs to rise. b) The amount of the income stream needs to fall and/or cost of capital needs to fall. c) The amount of the income stream needs to rise and/or cost of capital needs to fall. d) The amount of the income stream needs to rise and/or cost of capital needs to rise.

When interest rates rise, what needs to happen in order for the present value of an asset to remain the same, using a rate of return approach? a) The amount of the income stream needs to fall and/or cost of capital needs to rise. b) The amount of the income stream needs to fall and/or cost of capital needs to fall. c) The amount of the income stream needs to rise and/or cost of capital needs to fall. d) The amount of the income stream needs to rise and/or cost of capital needs to rise.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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