16. A company purchases a piece of construction equipment. The expected income is SAR 3,100 annually for its useful life of 15 years. Expenses are estimated to be SAR 355 annually. If the purchase price is SAR 25,000 and there is no salvage value, what is the rate of return, neglecting taxes? (select the closest answer) a) 5.2% b) 6.4% c) 6.8% d) 7.0%

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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16. A company purchases a piece of construction equipment. The expected income is SAR 3,100
annually for its useful life of 15 years. Expenses are estimated to be SAR 355 annually. If the
purchase price is SAR 25,000 and there is no salvage value, what is the rate of return,
neglecting taxes? (select the closest answer)
a) 5.2%
b) 6.4%
c) 6.8%
d) 7.0%
Transcribed Image Text:16. A company purchases a piece of construction equipment. The expected income is SAR 3,100 annually for its useful life of 15 years. Expenses are estimated to be SAR 355 annually. If the purchase price is SAR 25,000 and there is no salvage value, what is the rate of return, neglecting taxes? (select the closest answer) a) 5.2% b) 6.4% c) 6.8% d) 7.0%
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