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A business firm borrows $1,000 for an investment project that will increase its net revenue by $1,100 two years from now, at which point it
A business firm borrows $1,000 for an investment project that will increase its net revenue by $1,100 two years from now, at which point it will pay back the loan and accumulated interest. Will the $1,100 be sufficient to cover the full amount of the loan repayment?
Yes, because $1,100 > $1,000.
Only if the interest rate on the loan is 1% or less.
Yes if the interest rate on the loan is 4%, but no if it is 6%.
Yes at any interest rate less than 10%.
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