Carla Vista's Hair Salon is considering opening a new location in French Lick, California. The cost of building a new salon is $300,000. A new salon will normally generate annual revenues of $64,570, with annual expenses (including depreciation) of $40,000. At the end of 15 years, the salon will have a salvage value of $78,000. Calculate the annual rate of return on the project. Annual rate of return %

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
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Carla Vista's Hair Salon is considering opening a new location in French Lick, California. The cost of building a new salon is $300,000. A
new salon will normally generate annual revenues of $64,570, with annual expenses (including depreciation) of $40,000. At the end of
15 years, the salon will have a salvage value of $78,000.
Calculate the annual rate of return on the project.
Annual rate of return
%
Transcribed Image Text:Carla Vista's Hair Salon is considering opening a new location in French Lick, California. The cost of building a new salon is $300,000. A new salon will normally generate annual revenues of $64,570, with annual expenses (including depreciation) of $40,000. At the end of 15 years, the salon will have a salvage value of $78,000. Calculate the annual rate of return on the project. Annual rate of return %
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