Macroeconomics 12th Edition by Michael Parkin

Exercise 6

Use the following data to work Problem. First Call, Inc., a smartphone company, plans to build an assembly plant that costs $10 million if the real interest rate is 6 percent a year or a larger plant that costs $12 million if the real interest rate is 5 per­cent a year or a smaller plant that costs $8 million if the real interest rate is 7 percent a year.
First Call expects its profit to double next year.
Explain how this increase in expected profit influences First Call's demand for loanable funds.