35. Use the table below that shows the rate of return and R&D spending for a hypothetical firm. Assume the interest-rate cost of funds is 8%. Expected rate of return (%) R&D (millions of $) 129 10 12 8 15 (a) What is the optimal amount of R&D expenditures? At this amount, what will be the marginal cost and what will be the marginal benefit of R&D spending? (b) Now assume that the interest-rate cost of funds rises to 12%. What will be the optimal amount of R&D spending? For this amount of R&D spending, what will be the marginal cost and what will be the marginal benefit (expected rate of return)? (C) Now assume that the interest-rate cost of funds falls to 6%. What will be the optimal amount of R&D spending? For this amount of R&D spending, what will be the marginal cost and what will be the marginal benefit (expected rate of return)? 35. Use the table below that shows the rate of return and R&D spending for a hypothetical firm. Assume the interest-rate cost of funds is 8%. Expected rate of return (%) R&D (millions of $) 129 10 12 8 15 (a) What is the optimal amount of R&D expenditures? At this amount, what will be the marginal cost and what will be the marginal benefit of R&D spending? (b) Now assume that the interest-rate cost of funds rises to 12%. What will be the optimal amount of R&D spending? For this amount of R&D spending, what will be the marginal cost and what will be the marginal benefit (expected rate of return)? (C) Now assume that the interest-rate cost of funds falls to 6%. What will be the optimal amount of R&D spending? For this amount of R&D spending, what will be the marginal cost and what will be the marginal benefit (expected rate of return)