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the end of five years, the project would terminate and the equipment would be sold for its salvage value of $400,000. The company's discount
the end of five years, the project would terminate and the equipment would be sold for its salvage value of $400,000. The company's discount rate is 14%. The project would provide net operating income each year as follows: Sales Variable expenses $2,875,000 1,124,000 Contribution margin 1,751,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs. $721,000 Depreciation 478,400 Total fixed expenses 1,199,400 $ 551,600 Net operating income Required: If the equipment's salvage value was $600,000 instead of $400,000, what would be the project's simple rate of return? (Round your answer to 2 decimal places.) Simple rate of return %
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