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An initial investment of $50,000 in Bonitas Bunks is expected to pay off greatlybut not equallyin each of the next 5 years. The company expects
An initial investment of $50,000 in Bonitas Bunks is expected to pay off greatlybut not equallyin each of the next 5 years. The company expects a small increase in operating income in year 1 of $4,500, but then steadily larger improvements in profitability in years 25: $10,375, $18,750, $21,750, and $24,625, respectively. The year prior to this investment, the companys ARR was 9%, and its tax rate was 20%. What level of ARR does this projection provide? (Round answer to 2 decimal places, e.g. 15.25%.)
ARR | % |
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