A company projects an increase in net income of $148500 each year for the next five years if it invests $900000 in new equipment. The equipment has a 5-year life and an estimated salvage value of $300000. What is the annual rate of return on this investment? 24.8% 16.5% O33.4% 30.0%

A company projects an increase in net income of $148500 each year for the next five years if it invests $900000 in new equipment. The equipment has a 5-year life and an estimated salvage value of $300000. What is the annual rate of return on this investment? 24.8% 16.5% O33.4% 30.0%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 3P

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please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly

A company projects an increase in net income of $148500 each year for the next five years if it invests $900000 in new equipment.
The equipment has a 5-year life and an estimated salvage value of $300000. What is the annual rate of return on this investment?
24.8%
16.5%
O33.4%
30.0%

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