EV Box is a manufacturer of electric vehicle charging stations and charging software. The initial cost of one part of their manufacturing process was $130,000 with annual costs of $49,000. Revenues were $78,000 in year 1, increasing by $1000 per year. A salvage value of $23,000 was realized when the process was discontinued after 8 years. Determine the rate of return the company made on the process. EV Box is a manufacturer of electric vehicle charging stations and charging software. The initial costof one part of their manufacturing process was $130,000 with annual costs of $49,000. Revenueswere $78,000 in year 1, increasing by $1000 per year. A salvage value of $23,000 was realized whenthe process was discontinued after 8 years. Determine the rate of return the company made on theprocess.

Answered: EV Box is a manufacturer of electric…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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EV Box is a manufacturer of electric vehicle charging stations and charging software. The initial cost of one part of their manufacturing process was $130,000 with annual costs of $49,000. Revenues were $78,000 in year 1, increasing by $1000 per year. A salvage value of $23,000 was realized when the process was discontinued after 8 years. Determine the rate of return the company made on the process.

Expert Solution

Step 1: Define the rate of return-

The rate of return is a financial metric that measures the profitability or performance of an investment over a specific period. It reflects the percentage increase or decrease in the value of an investment over time.

The formula for calculating the rate of return is as follows:

Rate of Return = (Ending Value of Investment - Beginning Value of Investment) / Beginning Value of Investment

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