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Exercise 10-15A (Algo) Computing the payback period and unadjusted rate of return for the same investment opportunity LO 10-4 Solomon Rentals can purchase a van

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Exercise 10-15A (Algo) Computing the payback period and unadjusted rate of return for the same investment opportunity LO 10-4 Solomon Rentals can purchase a van that costs $170,000; it has an expected useful life of five years and no salvage value. Solomon uses straight-line depreciation. Expected revenue is $61,965 per year. Assume that depreciation is the only expense associated with this investment. Required a. Determine the payback period. (Round your answer to 1 decimal place.) b. Determine the unadjusted rate of return based on the average cost of the investment. (Round your answer to 1 decimal place. (i.e., .234 should be entered as 23.4) ).)

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