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interest rate and risk are the only two factors involved in your question. if money is tight, then people are gonna charge you more to use it-hence increase in interest. also if the economy is red-hot the federal reserve steps in and says, "lets raise interest rates and everyone will stop doing so much business because interest is higher". if your business venture or loan is "risky" then a company is going to charge you a higer rate of return on their money- hence you pay more for the money.
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What is the concept of marginal cost of capital?
The marginal cost of capital (MCC) is the cost of the last dollar of capital raised, essentially the cost of another unit of capital raised. As more capital is raised, the marginal cost of capital rises.
What should a monopoly do if marginal revenue exceeds marginal cost?
increase output
What should the firm do if marginal revenue is greater than marginal cost?
If a firm's marginal revenue is greater than its marginal cost, it should increase production to maximize profits.
Why is the marginal cost of capital more relevant to making investment decisions than the historic cost of capital?
because of deprecation
How does an increase in wages affect a firms marginal cost curve?
Bbg
