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A delivery company is expanding its fleet by five vans at a total cost of $100,000. Operating and maintenance costs for the new vehicles are projected to be $25,000/year for the next eight years. After eight years, the vans will be sold for a total of $10,000. Annual revenues are expected to increase by $50,000 with the expanded fleet. Draw the net cash flow diagram. What is the company’s rate of return on the purchase?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91416167

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