In the 1980s, U.S. banks offered All-Saver Certificates for a one-year term. The interest rate on these certificates was 70% of the contemporaneous one-year U.S. Treasury Note rate. One year Treasury bills (T-bills) are expected to be 24,500 units. What effect would such a price drop have on EBIT for the next three years?
a)EBIT will decrease
b)EBIT will increase
c)EBIT will remain the same
d)Insufficient information to determine the effect