A BC Corp.s proposed project with an estimated life of 20 years and salvage value of P100,000 requires an initial investment of P 1,000,000. It will yield yearly cash inflow of P100, 000. Straight line method will be used.

The annual rate of return based on the initial investment is

Select one:

a. 10%

b. 5.5%

c. 5%

d. answer not given