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Q.    The Return on Investment (ROI) of a company ranges between 10-12% for the past three years. To finance its future fixed capital needs, it has the following options for borrowing debt.

                          Option 'A'  :      Rate of interest 9%

                          Option 'B'   :    Rate of interest 13%

  Which source of debt. 'Option A' or Option 'B', is better ?  Give reason in support of your answer. Also state the concept being used in talking the decision.

option b
 
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Option a is better becquse in option a ROI is greater than rate of interest on debt
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Option A is correct because return on investmeni is when more than rate of interest then company can prefer debt securities
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Option A is better
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Option A is better because we have to pay less interest than return earned..
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