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Assume the following information for a capital budgeting proposal with a five-year time horizon: Initial investment: Cost of equipment (zero salvage value) Annual revenues and
Assume the following information for a capital budgeting proposal with a five-year time horizon: Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: $485,000 Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket costs $300,000 $130,000 $ 50,000 $ 40,000 This proposal's simple rate of return is closest to: Multiple Choice 27% 19%. 11%. 16%
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