Refer to Scenario 1 . If Ajax can borrow at an interest rate of 5%, which projects should be considered? If Ajax can borrow at an interest rate of 11%, which projects should be considered?

What is the level of total investment if the interest rate is 10%?

At an interest rate of 5%, every project except the jet-ski facility should be considered because they will all offer a greater rate of return. At an interest rate of 11%, the water pipeline and the amphitheater should be considered, as they are the only ones that offer a greater rate of return. At an interest rate of 10%, $17,500,000 is the level of total investment because the new water pipeline, amphitheater, and roads will all be undertaken.