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Solomon Rentals can purchase a van that costs $170,000; it has an expected useful life of five years and no salvage value. Solomon uses straight-line
Solomon Rentals can purchase a van that costs $170,000; it has an expected useful life of five years and no salvage value. Solomon uses straight-line depreciation. Expected revenue is $61,965 per year. Assume that depreciation is the only expense associated with this investment. Required a. Determine the payback period. (Round your answer to 1 decimal place.) b. Determine the unadjusted rate of return based on the average cost of the investment. (Round your answer to 1 decimal place. (ie., .234 should be entered as 23.4).) Answer is complete but not entirely correct a. Payback period 2.7 years 63.6X b. Unadjusted rate of return
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