(Answered) The management of wyoming corporation is considering the

Accounting

The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment:

Year	Income from Operations	Net Cash Flow
1	$18,750	$93,750
2	18,750	93,750
3	18,750	93,750
4	18,750	93,750
5	18,750	93,750

The average rate of return for this investment is
a. 5%
b. 15%
c. 10%
d. 25%

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