u have invested in a business that proudly reports that it is profitable. Your investment of

$5,400

has produced a profit of $307.

The managers think that if you leave your $5,400

invested with them, they should be able to generate $307

per year inprofits for you in perpetuity. Evaluating other investment opportunities, you note that other long-term investments of similar risk offer an expected return of 7.9%.

Should you remain invested in this firm?

The expected return of your investment is

_____%.

(Round to one decimal place.)

(Select from the drop-down menus.)

If projects that are similar in horizon and risk are offering an expected return of

7.9%,

then this business is/is not

earning your opportunity cost of capital, and you should

.