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Vaughn Company is considering a long-term investment project called ZIP. ZIP will require an investment of $122,000. It will have a useful life of 4
Vaughn Company is considering a long-term investment project called ZIP. ZIP will require an investment of $122,000. It will have a useful life of 4 years and no salvage value. Annual revenues would increase by $79,430, and annual expenses (excluding depreciation) would increase by $41,000. Vaughn uses the straight-line method to compute depreciation expense. The company's required rate of return is 10%. Compute the annual rate of return. \begin{tabular}{l|l} Annual rate of return & % \\ \hline \end{tabular} Determine whether the project is acceptable? the project
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