Kunkle Company Wishes to Earn 20% Annually on Its Investments

question 111

Multiple Choice

Kunkle Company wishes to earn 20% annually on its investments. If Kunkle makes an investment that equals or exceeds that rate, it considers it a success. Assume that Kunkle invests $2 million and gets $500,000 in return at the end of each year for X years. What is the minimum value of X (number of years) for which Kunkle will consider the investment a success? Assume that Kunkle can't invest for fractional parts of a year.

• A) 4 years.
• B) 6 years.
• C) 7 years.
• D) 9 years.

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