Refer question 1 and answer both the questios Question 1 Afrm raises capital to invest in a business project. The marginal revenue from the first 5 units of capital is: 1st unit has MR $1.64, 2nd unit has MR 1.41, 3rd unit has MR 1.30, 4th unit has MR 1.23, and 5th unit has MR 1.18. If the interest rate is 26%, what is the optimal amount of capital for this firm to borrow? O. 2 O. 3 O. 4 O .5 Question 2 Consider the MR figures in Problem 1. If this firm borrows exactly 5 units of capital, what is the firm's total revenue? O. 6.05 O. 6.76 O. 6.89 O. 7.14
Refer question 1 and answer both the questios Question 1 Afrm raises capital to invest in a business project. The marginal revenue from the first 5 units of capital is: 1st unit has MR $1.64, 2nd unit has MR 1.41, 3rd unit has MR 1.30, 4th unit has MR 1.23, and 5th unit has MR 1.18. If the interest rate is 26%, what is the optimal amount of capital for this firm to borrow? O. 2 O. 3 O. 4 O .5 Question 2 Consider the MR figures in Problem 1. If this firm borrows exactly 5 units of capital, what is the firm's total revenue? O. 6.05 O. 6.76 O. 6.89 O. 7.14
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Refer question 1 and answer both the questios
Question 1
Afrm raises capital to invest in a business project. The marginal revenue from
the first 5 units of capital is: 1st unit has MR $1.64, 2nd unit has MR 1.41, 3rd
unit has MR 1.30, 4th unit has MR 1.23, and 5th unit has MR 1.18. If the interest
rate is 26%, what is the optimal amount of capital for this firm to borrow?
O. 2
O. 3
O. 4
O .5
Question 2
Consider the MR figures in Problem 1. If this firm borrows exactly 5 units of
capital, what is the firm's total revenue?
O. 6.05
O. 6.76
O. 6.89
O. 7.14
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Managerial Economics: A Problem Solving Approach](https://www.bartleby.com/isbn_cover_images/9781337106665/9781337106665_smallCoverImage.gif)
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
![Managerial Economics & Business Strategy (Mcgraw-…](https://www.bartleby.com/isbn_cover_images/9781259290619/9781259290619_smallCoverImage.gif)
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education