A company projects an increase in net income of $30,000 each year for the next five years if it invests $300,000 in new equipment. The equipment has a five-year life and an estimated salvage value of $100,000. What is the annual rate of return on this investment?
A) 10%
B) 15%
C) 20%
D) 25%

Question

Quizplus · Accepted Answer

The Answer of A company projects an increase in net income of $30,000 each year for the next five years if it invests $300,000 in new equipment. The equipment has a five-year life and an estimated salvage value of $100,000. What is the annual rate of return on this investment?
A) 10%
B) 15%
C) 20%
D) 25%

A Company Projects an Increase in Net Income of $30,000