Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required in equipment$30,000 Annual cash inflows $6,000per yearSalvage value of equipment$0 Life of the investment 15yearsRequired rate of return 10%The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment.The simple rate of return for the investment (rounded to the nearest tenth of a percent) is:
A. 18.0%
B. 13.3%
C. 20.0%
D. 10.0%
Answer: B
Business
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