Answer:
16.7%
Explanation:
The simple rate of return is the annual net income divided by the initial investment in the proposed investment project.
The annual net income is the annual cash flow of $8,400 minus annual depreciation charge.
annual depreciation=cost -salvage value/useful life=($36,000-$0)/15=$2400
annual net income=$8,400-$2,400=$6000
simple rate of return =annual net income/initial investment
initial investment is $36,000
simple rate of return=$6,000/$36,000=16.7%
The second option,16,7% is the correct answer