Basics Of Engineering Economy
Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
Question
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Chapter 6, Problem 1P
To determine

Possible rate of return.

Expert Solution & Answer
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Explanation of Solution

Option (a):

The possible highest rate of return is infinitive. The reason is that a firm can earn more and more of earning. The maximum earning cannot be determined.

Option (b):

The lowest possible rate of return is -100%. The reason is that the firm will lose all the investment which is equal 100%. %.

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