Would it be a rational business decision for cuppa company

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Reference no: EM132277670

Using the formula for the rate of return ((Projected Revenue - Estimated Cost) / Estimated Cost x 100), assume that the interest rate in the loanable funds market is 7% and the projected revenue from investing in a Cuppa Coffee Company is $100,500 and the estimated cost of the project is $93,000.

Would it be a rational business decision for the Cuppa Coffee Company to borrow the funds necessary to invest in the new coffee roaster? Show work and explain.

Reference no: EM132277670

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