1. A business idea requires to spend $20,000 on training the staff this year and will save $1,000 a every year afterwards (because the staff is more productive).
   1. Will the firm implement the idea if the interest rate is 4%? Explain.
   2. Will the firm implement the idea if the interest rate is 8%? Explain.
   3. At what interest rate is the firm indifferent between implementing the idea and abandoning it? Explain.

Answer rating: 100% (QA)

To determine whether the firm will implement the idea at different interest rates we can calculate t... View the full answer