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Oriental Corporation has gathered the following data on a proposed investment project: Investment in depreciable equipment $ 200,000 Annual net cash flows $ 40,000 Life
Oriental Corporation has gathered the following data on a proposed investment project:
Investment in depreciable equipment $ 200,000
Annual net cash flows | $ 40,000 |
Life of the equipment | 10 years |
Salvage value | $ 0 |
Discount rate | 10 % |
Assume cash flows occur uniformly throughout a year except for the initial investment.
The simple rate of return on the investment would be:
Group of answer choices
15%
35%
20%
10%
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