Exercise 26-8

Pierres Hair Salon is considering opening a new location in French Lick, California. The cost of building a new salon is $306,000. A new salon will normally generate annual revenues of $57,600, with annual expenses (including depreciation) of $38,600. At the end of 15 years the salon will have a salvage value of $74,000.

Calculate the annual rate of return on the project.(Round answer to 0 decimal places, e.g. 125.)

Annual rate of return

%