how to calculate rate of return on an investment
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Question
Shields Company has gathered the following data on a proposed investment project: (Ignore income taxes.)
|
Investment required in equipment |
$560,000 |
|
Annual cash inflows |
$82,000 |
|
Salvage value |
$0 |
|
Life of the investment |
16 years |
|
Discount rate |
9% |
The simple rate of return on the investment is closest to:
a.5%
b.8%
c.13%
d.9%
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