A grocery store manager must decide whether to buy a rug cleaner to rent to customers.The cleaner costs $800.It is expected to yield $200 in income per year.What is the expected annual rate of return from the cleaner?

Question

Quizplus · Accepted Answer

The expected annual rate of return is calculated by dividing the annual income by the cost of the investment. Here, $200 (annual income) divided by $800 (cost) equals 0.25, or 25 percent.

A Grocery Store Manager Must Decide Whether to Buy a Rug