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

Question

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

Quizplus · Accepted Answer

11eacbfc_c61f_c7bd_8ffe_1dfe339a3155_TB7552_00 Simple rate of return = Annual incremental net operating income ÷ Initial investment
= $4,000 ÷ $30,000 = 13.3% (rounded)

Joetz Corporation Has Gathered the Following Data on a Proposed