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Question text If the interest rate rises to 25% would the investment still take place?

Question text If the interest rate rises to 25% would the investment still take place?

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Answer #1

Investment depends on rate of interest as well as rate of return.If the rate of return from investment is higher,for instance 35% then the firm will undertake investment at an interest rate of 25%.

If rate of return is less than 25% then investment would not take place.

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