Pierres Hair Salon is considering opening a new location in French Lick, California. The cost of building a new salon is $300,000. A new salon will normally generate annual revenues of $70,000, with annual expenses (including depreciation) of $41,500. At the end of 15 years, the salon will have a salvage value of $80,000.

Instructions

Calculate the annual rate of return on the project.

Calculation (What # + or what #)

Companys expected annual income

The average investment

Annual rate of return is