Oriental Corporation has gathered the following data on a proposed investment project: 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 on the investment would be:

Question

Oriental Corporation has gathered the following data on a proposed investment project:  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 on the investment would be:

Quizplus · Accepted Answer

11eacbfc_c620_8b13_8ffe_13803979f7ab_TB7552_00 Simple rate of return = Annual incremental net operating income ÷ Initial investment
= $30,000 ÷ $200,000 = 15%

Oriental Corporation Has Gathered the Following Data on a Proposed