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Pierre's Hair Salon is considering opening a new location in French Lick, California. The cost of building a new salon is $260,000. A new salon will normally generate annual revenues of $56,800, with annual expenses (including depreciation) of $40,100. At the end of 15 years the salon will have a salvage value of $74,000. Calculate the annual rate of return on the project. Annual rate of return %

Pierre's Hair Salon is considering opening a new location in French Lick, California. The cost of building a new salon is $260,000. A new salon will normally generate annual revenues of $56,800, with annual expenses (including depreciation) of $40,100. At the end of 15 years the salon will have a salvage value of $74,000. Calculate the annual rate of return on the project. Annual rate of return %

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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Rakesh 

Pierre's Hair Salon is considering opening a new location in French Lick, California. The cost of building a new salon is $260,000. A new salon will normally generate annual revenues of $56,800, with annual expenses (including depreciation) of $40,100. At the end of 15 years the salon will have a salvage value of $74,000. Calculate the annual rate of return on the project. Annual rate of return %
Transcribed Image Text:Pierre's Hair Salon is considering opening a new location in French Lick, California. The cost of building a new salon is $260,000. A new salon will normally generate annual revenues of $56,800, with annual expenses (including depreciation) of $40,100. At the end of 15 years the salon will have a salvage value of $74,000. Calculate the annual rate of return on the project. Annual rate of return %
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