Parkhill, Smith, and Cooper, a consulting engineering firm, pays a bonus to each engineer at the end of the year based on the company’s profit for that year. If the company’s initial investment was $1.2 million, what rate of return has it made if each engineer’s bonus has been $3000 per year for the past 10 years? Assume the company has six engineers and that the bonus money represents 5% of the company’s profit.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Parkhill, Smith, and Cooper, a consulting engineering
firm, pays a bonus to each engineer at the
end of the year based on the company’s profit for
that year. If the company’s initial investment was $1.2 million, what rate of return has it made if each
engineer’s bonus has been $3000 per year for the
past 10 years? Assume the company has six engineers
and that the bonus money represents 5% of
the company’s profit.

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