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Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required in equipment Annual cash inflows $35,000 $ 8,000 24 Salvage value of equipment 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. The simple rate of return for the investment (rounded to the nearest tenth of a percent) is: (Round your answer to 1 decimal place.) Multiple Choice

Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required in equipment Annual cash inflows $35,000 $ 8,000 24 Salvage value of equipment 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. The simple rate of return for the investment (rounded to the nearest tenth of a percent) is: (Round your answer to 1 decimal place.) Multiple Choice

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required in equipment $35,000 $ 8,000 Annual cash inflows Salvage value of equipment Life of the investment %24 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. The simple rate of return for the investment (rounded to the nearest tenth of a percent) is: (Round your answer 1 decimal place.) Multiple Choice 26.6% 16.2% 23.0%
Transcribed Image Text:Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required in equipment $35,000 $ 8,000 Annual cash inflows Salvage value of equipment Life of the investment %24 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. The simple rate of return for the investment (rounded to the nearest tenth of a percent) is: (Round your answer 1 decimal place.) Multiple Choice 26.6% 16.2% 23.0%
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