If a one-year project costs $100,000 and is expected to return the firm $105,000, the rate of return of the project is:

Name: If a one-year project costs $100,000 and is expected to return the firm $105,000, the rate of return of the project is:
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Question

Quizplus · Accepted Answer

The rate of return of the project is calculated by dividing the expected return by the cost of the project and multiplying by 100%. In this case, the calculation would be (105,000-100,000) / 100,000 x 100% = 5%. Therefore, the answer is choice B.

If a One-Year Project Costs $100,000 and Is Expected to Return