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question 67

Multiple Choice

[The following information applies to the questions displayed below.]
Neville Company is considering an investment of $380,000 in heavy equipment,which will enable the company to be more competitive in the construction industry.The useful service life of the equipment is estimated to be 10 years,with $30,000 salvage value.Straight-line depreciation is used.The company estimates that net income will increase by $41,000 per year as a result of the company's ability to handle a wider range of projects with the new equipment.
-The expected rate of return on average investment will be approximately:

• A)20%.
• B)43%.
• C)23%.
• D)37%.

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