Vebco Water and Gas received a contract for a seawa­ter desalination plant wherein the company expected to make a 28% rate of return on its investment. (a) If Vebco invested $8 million the first year, what was the amount of its profit in that year? (b) What amount would have to be invested to realize the same mone­tary amount of return if the rate decreases to 15% per year?

What will be an ideal response?


(a) Profit = 8,000,000*0.28
= $2,240,000

(b) Investment = 2,240,000/0.15

= $14,933,333

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