(Ignore Income Taxes in This Problem

question 141

Multiple Choice

(Ignore income taxes in this problem.) An expansion at Fidell, Inc., would increase sales revenues by $75,000 per year and cash operating expenses by $38,000 per year. The initial investment would be for equipment that would cost $135,000 and have a 5 year life with no salvage value. The annual depreciation on the equipment would be $27,000. The simple rate of return on the investment is closest to:

• A)20.0%
• B)7.4%
• C)27.4%
• D)13.3%

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Definitions:

Opening Line

The first sentence or phrase in a book, conversation, or speech, often designed to grab attention.

Halo Effect

A cognitive bias where an observer's overall impression of a person influences their feelings and thoughts about that person's character or properties.

Nonattractive

A subjective assessment indicating that something does not evoke interest, desire, or appeal visually or in other sensory ways.

Sex Differences

Biological or physiological distinctions between males and females, including anatomy, genetics, and hormonal differences.