A Company Projects an Increase in Net Income of $180000

question 105

Multiple Choice

A company projects an increase in net income of $180000 each year for the next five years if it invests $900000 in new equipment. The equipment has a five-year life and an estimated salvage value of $300000. What is the annual rate of return on this investment?

• A) 30%
• B) 20%
• C) 40%
• D) 60%

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Definitions:

Competitive Advantage

Competitive advantage is the attribute that allows an organization to outperform its competitors, stemming from unique resources, capabilities, or position.

Road Map

A detailed plan or strategy intended to achieve specific goals or objectives, often outlining key steps and milestones.

Effective Compensation

Compensation strategies that are fair, competitive, and aligned with the organization's goals, thereby motivating employees.

Compensation Mix

The combination of direct compensation (like salary and wages) and indirect compensation (such as benefits) that an employee receives.