The owner of Speedee Copy Center calculates that purchasing a new $13,000 color copier would return $1800 a year after payment of all expenses besides interest payments on borrowing $13,000.What is the maximum interest rate that makes purchasing the copier profitable?
A)13.84 percent.
B)7.22 percent.
C)8.62 percent.
D)12.16 percent.

Question

Quizplus · Accepted Answer

The maximum interest rate that makes purchasing the copier profitable is 13.84 percent. This is because the $1800 annual return after expenses is just enough to cover the $13,000 loan plus 13.84 percent interest.

The Owner of Speedee Copy Center Calculates That Purchasing a New