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Blossom Company is considering a long-term investment project called ZIP.ZIP will require an investment of $116.000. It will have a useful life of 4
Blossom Company is considering a long-term investment project called ZIP.ZIP will require an investment of $116.000. It will have a useful life of 4 years and no salvage value. Annual revenues would increase by $79.020, and annual expenses (excluding depreciation) would increase by $39,000. Blossom uses the straight-line method to compute depreciation expense. The company's required rate of return is 16% Compute the annual rate of return. Annual rate of return Determine whether the project is acceptable? Accept the project. 9.50 %
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