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To Invest or Not to Invest?

It is important to understand the criteria for investment decisions. Consider the following data for the Cuppa Coffee Company, which is considering investing in a new high tech coffee roaster. (For simplicity's sake let's assume it's just for one year)

Interest rate in loanable funds market: 7.00%
Projected revenue from project: $100,500
Estimated cost of the project: $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? Why?

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