Amigo Mobility, which manufactures battery-powered mobility scooters, has $660,000 to invest. The company is considering three different battery projects that will yield the following rates of return: Deep cycle = 25% Wet/flooded = 45% Lithium ion = 17% The initial investment required for each project is $160,000, $100,000, and $400,00O, respectively. If Amigo's invests in all three projects, what will be its overall rate of return? The rate of return is %.
Amigo Mobility, which manufactures battery-powered mobility scooters, has $660,000 to invest. The company is considering three different battery projects that will yield the following rates of return: Deep cycle = 25% Wet/flooded = 45% Lithium ion = 17% The initial investment required for each project is $160,000, $100,000, and $400,00O, respectively. If Amigo's invests in all three projects, what will be its overall rate of return? The rate of return is %.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![**Investment Problem Overview**
Amigo Mobility, a company that manufactures battery-powered mobility scooters, has a total of $660,000 available for investment. The company is evaluating three distinct battery projects, each offering a specific rate of return:
- Deep Cycle Battery: 25% rate of return
- Wet/Flooded Battery: 45% rate of return
- Lithium Ion Battery: 17% rate of return
The initial investment amounts required for these projects are as follows:
- Deep Cycle: $160,000
- Wet/Flooded: $100,000
- Lithium Ion: $400,000
The key question is: If Amigo Mobility chooses to invest in all three projects, what will be the overall rate of return?
**Calculation Required**
To determine the overall rate of return, a weighted average of the individual rates of return based on their respective investment amounts needs to be calculated.
Enter the overall rate of return in the box provided:
The rate of return is [_____ ] %.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F30f8b710-1a61-4c05-9269-dd497cde8c1e%2F99ef0d7e-35c6-4e1e-9da3-4b05ab7a0722%2F149x15d_processed.png&w=3840&q=75)
Transcribed Image Text:**Investment Problem Overview**
Amigo Mobility, a company that manufactures battery-powered mobility scooters, has a total of $660,000 available for investment. The company is evaluating three distinct battery projects, each offering a specific rate of return:
- Deep Cycle Battery: 25% rate of return
- Wet/Flooded Battery: 45% rate of return
- Lithium Ion Battery: 17% rate of return
The initial investment amounts required for these projects are as follows:
- Deep Cycle: $160,000
- Wet/Flooded: $100,000
- Lithium Ion: $400,000
The key question is: If Amigo Mobility chooses to invest in all three projects, what will be the overall rate of return?
**Calculation Required**
To determine the overall rate of return, a weighted average of the individual rates of return based on their respective investment amounts needs to be calculated.
Enter the overall rate of return in the box provided:
The rate of return is [_____ ] %.
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