Your firm is considering introducing a new product for which net returns are expected to be
Year 1 to Year 3, inclusive: ………………. $2000 per year
Year 4 to Year 8, inclusive: ……….……… $5000 per year
Year 9 to Year 12, inclusive: ………..……. $3000 per year
The introduction of the product requires an immediate outlay of $15 000 for equipment estimated to have a salvage value of $2000 after 12 years.
Find the rate of return for situations below (correct to the nearest 10th of a percent).