Ikan Fishery, a local fish farm, is considering purchasing a new plot of land for their business for $500,000. The land would allow Ikan Fishery to increase their pre-tax cash flows by $150,000 each year. The company would plan to keep the land for 10 years before selling it for $550,000. Because the land is real property, the company would not take any related depreciation. Ikan Fishery's tax rate is 20%, and the required rate of return is 10%.
What is the Average Rate of Return of the proposed investment? (Round to 4 decimal places)

Question

Ikan Fishery, a local fish farm, is considering purchasing a new plot of land for their business for $500,000. The land would allow Ikan Fishery to increase their pre-tax cash flows by $150,000 each year. The company would plan to keep the land for 10 years before selling it for $550,000. Because the land is real property, the company would not take any related depreciation. Ikan Fishery's tax rate is 20%, and the required rate of return is 10%. 
What is the Average Rate of Return of the proposed investment? (Round to 4 decimal places)

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The Answer of Ikan Fishery, a local fish farm, is considering purchasing a new plot of land for their business for $500,000. The land would allow Ikan Fishery to increase their pre-tax cash flows by $150,000 each year. The company would plan to keep the land for 10 years before selling it for $550,000. Because the land is real property, the company would not take any related depreciation. Ikan Fishery's tax rate is 20%, and the required rate of return is 10%. 
What is the Average Rate of Return of the proposed investment? (Round to 4 decimal places)

Ikan Fishery, a Local Fish Farm, Is Considering Purchasing a New