Big Al's is considering the purchase of a capital investment costing $33,000. Annual cash savings of $8,000, with a present value at 14 percent of $37,111, are expected for the next eight years. Given this information, which of the following statements is true?
A) This investment offers an actual rate of return of 14%.
B) This investment offers an actual rate of return of less than 14%.
C) This investment offers an actual rate of return of more than 14%.
D) This investment offers a negative rate of return.
Correct Answer:
Verified
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