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Multiple Select Question

Select all that apply

Which of the following influence expected returns on investment projects?
Multiple select question.

Expectations about future business conditions

Household borrowing

Business taxes

Technology

Total income

Degree of excess capacity

1 answer

The factors that influence expected returns on investment projects from the options provided include:

  1. Expectations about future business conditions - This significantly affects returns as positive or negative expectations can influence investment decisions.

  2. Business taxes - Changes in taxation can directly impact the after-tax returns on investments, influencing decisions.

  3. Technology - Technological advancements can create new opportunities or efficiencies that affect expected returns positively.

  4. Degree of excess capacity - Having excess capacity may indicates potential inefficiencies and may influence expected returns depending on how it is managed.

The other options, household borrowing and total income, are less directly related to the expected returns on specific investment projects, although they may have indirect effects through broader economic conditions.

So, the applicable selections are:

  • Expectations about future business conditions
  • Business taxes
  • Technology
  • Degree of excess capacity