Question

comet powder company has purchased a piece of equipment costing $100,000. It is expected to generate a ten-year stream of benefits amounting to $16,273 per year. Determine the rate of return comet expects to earn from this equipment.

Answer 1

Answer:

60.27%

Step-by-step explanation:

Purchasing price is $100,000

Benefit per year is $ 16,273

Benefit after 10 years = $16,273*10 = $160,273

Returns in 10 years = $160,273-$100,000 = $60,273

Rate of return = 60,273/100,000 * 100%

=60.27%