Your answer is incorrect Try again Plerres Hair Salon is con

Your answer is incorrect. Try again. Plerre\'s Hair Salon is considering opening a new location in French Lick, Califomia. The cost of building a new salon is $317,000. A new salon will normally çenerate annual revenues of $59,550, with annual expenses (incduding depreciation) of $39,900. At the end of 15 years the salon will have a salvage value of $76,000. Calculate the annual rate of return on the project. (Round answer to 0 decimal places, eg. 12s.) Annual rate of return VIDEO APPLED SKILLS

Solution

Annual income = 59550-39900= $19650 Average investment = (317000+76000)/2= $196500 Annual rate of return = Annual income/Average investment = 19650/196500 = 10%