Question
Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required in equipment $38,500 Annual cash inflows $9,400 Salvage
Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.):
Investment required in equipment $38,500
Annual cash inflows $9,400
Salvage value of equipment $0
Life of the investment 15years
Required rate of return 10%
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:
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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
6th edition
978-0077328894, 71313974, 9780077395810, 77328892, 9780071313971, 77395816, 978-0077400163
