Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required
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Question:
Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.):
Investment required in equipment$30,000Annual cash inflows$6,000Salvage value of equipment$0Life of the investment15yearsRequired rate of return10%
The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment.
The simple rate of return for the investment (rounded to the nearest tenth of a percent) is:
Multiple Choice
- 20.0%
- 13.3%
- 18.0%
- 10.0%
Posted Date: