Amalgamated Widget 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 (6.5%)Project D (11%)Project E (5.5%)The current interest rate in the loanable funds market is 6%. However, if an increase in government borrowing pushes the interest rate to 8%, we would expect the company to undertake ________ projects.
A. four
B. five
C. two
D. three
Answer: C
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What will be an ideal response?
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