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Consider the following Investment Opportunity:

Initial cost at time 0.......$15 Million

Annual revenues beginning at time 1.....$25 million

Annual operating costs exclusive of depreciation .....$13 million

Expected life of investment.....6 years

Salvage value after taxes.....$0 dollars

Annual depreciation for tax purposes.....$3 million

Tax Rate..........40%

What is the rate of return on this investment?

a) 23.44%

b) 19.14%

c) 28.72%

d) 51.34%

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91383438

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