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25-05-2023
Mathematics

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Consider a firm that uses capital, K, to invest in a project that generates revenue and the MR from the 1st, 2nd, 3rd, 4th & 5th unit of K is $1.75, 1.48, 1.26, 1.18 and 1.13, respectively. (This is just MR table, as in the notes). If the interest rate is 21%, then the optimal K* for the firm to borrow is 02 3 04 05

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