Assume that if the interest rate that businesses must pay to borrow funds were 20 percent, it would be unprofitable for businesses to invest in new machinery and equipment so that investment would be zero. but if the interest rate were 16 percent, businesses will find it profitable to invest $10 billion. if the interest rate were 12 percent, $20 billion would be invested. assume that total investment continues to increase by $10 billion for each successive 4 percentage point decline in the interest rate. refer to the above graph. which of the following is the correct graphical presentation of the indicated relationship?
a) there is no regular or dependable relationship between business investment and the interest rate
b) the amount of business investment is unaffected by changes in the interest rate
c) investment spending by businesses varies inversely with the interest rate.
d) investment spending by businesses varies directly with the interest rate.

Mr. smith recently faced a choice between being (a) an economics profes-sor, which pays $60,000/yr, or (b) a safari leader, which pays $50,000/yr. after careful deliberation, smith took the safari job, but it was a close call. "for a dollar more," he said, "i'd have gone the other way."now smith's brother-in-law approaches him with a business proposition. the terms are as follows: - smith must resign his safari job to work full-time in his brother-in-law's business.- smith must give his brother-in-law an interest-free loan of $100,000, which will be repaid in full if and when smith leaves the business. (smith currently has much more than $100,000 in the the business will pay smith a salary of $70,000/yr. he will receive no other payment from the business.the interest rate is 10 percent per year. apart from salary considerations, smith feels that working in the business would be just as enjoyable as being an economics professor. for simplicity, assume there is no uncertainty regarding either smith's salary in the proposed business or the security of his monetary investment in it. should smith join his brother-in-law and, if so, how small would smith's salary from the business have to be to make it not worthwhile for him to join? if not, how large would smith's salary from the business have to be to make it worthwhile for him to join?

Brandt enterprises is considering a new project that has a cost of $1,000,000, and the cfo set up the following simple decision tree to show its three most likely scenarios. the firm could arrange with its work force and suppliers to cease operations at the end of year 1 should it choose to do so, but to obtain this abandonment option, it would have to make a payment to those parties. how much is the option to abandon worth to the firm?

Based on what you learned about time management which of these statements are true