Allen Steel Company is considering whether to build a new mill. If the interest

Question

Allen Steel Company is considering whether to build a new mill. If the interest rate rises, a. the present value of the returns from the mill will fall, so Allen will be less likely to build the mill. b. the present value of the returns from the mill will fall, so Allen will be more likely to build the mill. c. the present value of the returns from the mill will rise, so Allen will be less likely to build the mill. d. the present value of the returns from the mill will rise, so Allen will be more likely to build the mill.

Explanation / Answer

As interest rate increase present value will decrease so he will consider less likely to build the mill

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