12-5

Wayne Company is considering a long-term investment project called ZIP. ZIP will require an investment of $117,280. it will have a useful life of 4 years and no salvage value. Annual revenues would increase by $80,200, and annual expenses (excluding depreciation) would increase by $39,200. Wayne uses the straight-line method to compute depreciation expenses. The company's required rate of return is 17%. Compute the annual rate of return. ( Round answer to 0 decimal places, e.g.15%) Annual rate of return Determine whether the project is acceptable? the project