The user cost of capital depends on: 1. Real rate of interest 2. Rate of depreciation 3. Stock of money…
The user cost of capital depends on the real interest rate, depreciation and corporate income tax. Interest represents the financing or opportunity cost, depreciation…
Choose your answer
The user cost of capital depends on:
1. Real rate of interest
2. Rate of depreciation
3. Stock of money supply
4. MEC
5. Corporate income tax
6. Velocity of circulation and CRR
Answer and explanation
Correct answer B
The user cost of capital depends on the real interest rate, depreciation and corporate income tax. Interest represents the financing or opportunity cost, depreciation reflects the loss in the asset's value, and taxation changes the cost of employing capital.
Practice for these exams
-
Kerala SET (LBS Centre)