amandarenee8570 amandarenee8570

01-05-2020
Business

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Kermit plans to open a boutique. The initial investment is $10,000. He has to spend $1,500 in annual operations and maintenance. The boutique generates $3,000 in revenues every year. Kermit uses a 10 year planning horizon and a MARR of 12%. The correctly calculated Rate of Return for this project is %. Enter the ROR as a percentage with 2 decimals. For example 2.34% will be entered as 2.34. Do NOT use the % symbol. Based on the calculated ROR should Kermit invest in the boutique?

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Amakamerem Amakamerem

02-05-2020

Answer:

8.14.

Explanation:

The Rate of Return is 8.14 from my calculations which you can find in the attached file.

Now since the Rate of return is 8.14. Which is less than MARR of 12%, it shows that investment is not good.

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