Hilltop Moving Company is considering investing in 2 new trucks for their residential moving business. The investment will require an outlay of $190,000 initially, and is expected to generate the following pre-tax cash flows:
The trucks would be fully depreciated on a straight-line basis over the course of 5 years, with a full year of depreciation taken in the first year. Even though they will be fully depreciated, the company expects to be able to sell the trucks for $20,000. The company uses a discount rate of 9%, and pays a marginal tax rate of 25%.
What is the Average Rate of Return of this proposed investment? (Round to 4 decimal places)

Question

Hilltop Moving Company is considering investing in 2 new trucks for their residential moving business. The investment will require an outlay of $190,000 initially, and is expected to generate the following pre-tax cash flows: 
  The trucks would be fully depreciated on a straight-line basis over the course of 5 years, with a full year of depreciation taken in the first year. Even though they will be fully depreciated, the company expects to be able to sell the trucks for $20,000. The company uses a discount rate of 9%, and pays a marginal tax rate of 25%.
What is the Average Rate of Return of this proposed investment? (Round to 4 decimal places)

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The Answer of Hilltop Moving Company is considering investing in 2 new trucks for their residential moving business. The investment will require an outlay of $190,000 initially, and is expected to generate the following pre-tax cash flows: 
  The trucks would be fully depreciated on a straight-line basis over the course of 5 years, with a full year of depreciation taken in the first year. Even though they will be fully depreciated, the company expects to be able to sell the trucks for $20,000. The company uses a discount rate of 9%, and pays a marginal tax rate of 25%.
What is the Average Rate of Return of this proposed investment? (Round to 4 decimal places)

Hilltop Moving Company Is Considering Investing in 2 New Trucks