XYZ Gadget Company is currently considering which investment projects it should undertake. The following list of projects along with the estimated rate of return of each project is presented to the executive management team:Project A (9%)Project B (7.5%)Project C (6%)Project D (11%)Project E (5.5%)The current interest rate in the loanable funds market is 7%. However, the government is considering an increase in government borrowing to implement fiscal policy. How high would interest rates need to go to induce the company to drop all but one of its planned investment projects?
A. Above 9%
B. Above 7%
C. Above 7.5%
D. Above 11%
Answer: A
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