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What the simple rate of return for the investment is

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Reference no: EM132803960

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

Investment required in equipment $ 36,000

Annual cash inflows $ 8,400

Salvage value of equipment $ 0

Life of the investment 15 years

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.

Problem 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.)

Reference no: EM132803960

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