Final answer:
The firm will adjust its investment considering the cost of capital and the return to society. An interest rate of 9% and a societal return of 5% results in an effective return of 4% for the firm, potentially leading to a $183 million investment.
Step-by-step explanation:
The scenario suggests a consideration of interest rates and societal returns when calculating the investment potential for the business.
For instance, with a 9% interest rate, the cost of capital becomes a significant factor, and if the firm can achieve a 5% societal return, it adjusts the effective return on investment to 4%.
Using these parameters, the firm might contemplate investing $183 million.
In a contrasting scenario, if a firm earns a 6% return on an investment without borrowing, avoiding an 8% loan interest, the investment becomes more viable, as the firm realizes a return exceeding the cost it would have incurred in interest payments.