Solve the following by the Trial and Error method as outlined in the text and ex

Question

Solve the following by the Trial and Error method as outlined in the text and explained in the recording (Excel solutions will not be accepted). Your solution must show all equations with the factor values inserted (12), and the answer (3). The first cost of a product sold by JadaTech Inc. was $189,000. It has annual costs of $73,500 and annual revenues of $132,000. A salvage value of $49,500 was realized when the product was discontinued after 8 years. What rate of return did JadaTech make on the product?

Explanation / Answer

the cost of the machine after salvage value= 189000-49500= $139,000

the average return = 132,000-73500= 58500 per annum

the average rate of return= average income / average investment

53500/139,000= 38.48%

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