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Find the simple rate of return for the investment

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Reference no: EM132527405

Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.):

Investment required in equipment$32,000

Annual cash inflows $6,800

Salvage value of equipment$0

Life of the investment 15years

Required rate of return 10%

  • The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment.

Question 1: The simple rate of return for the investment (rounded to the nearest tenth of a percent) is: (Round your answer to 1 decimal place.)

Multiple Choice

Option 1: 22.7%

Option 2: 14.6%

Option 3: 20.2%

Option 4: 10.7%

Reference no: EM132527405

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