increasing cost of capital

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wolfe
wolfe Registered Posts: 121 Dedicated contributor 🦉
in AAT Level 3 (Level 6 in Scotland)
hi
is it right to say that if the cost of capital is increased by 2% it would make the investment less viable COZ MORE INTEREST COST HAS TO BE PAID???
thaks in advance

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  • CJC77
    CJC77 Registered Posts: 62 Regular contributor ⭐
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    wolfe wrote: »
    hi
    is it right to say that if the cost of capital is increased by 2% it would make the investment less viable COZ MORE INTEREST COST HAS TO BE PAID???
    thaks in advance

    Can't comment on the last part - I just know that increasing the discount % rate will always make something less viable as it reduces the Net Present Value

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