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Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.):...

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Accounting

Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.):

Investment required in equipment $ 30,500
Annual cash inflows $ 6,200
Salvage value of equipment $ 0
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:

Multiple Choice

20.7%

10.2%

18.7%

13.7%

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