Amigo Mobility, which manufactures battery powered mobility scooters, has $700,000 to invest. The company is considering three

Question:

Amigo Mobility, which manufactures battery powered mobility scooters, has $700,000 to invest.

The company is considering three different battery projects that will yield the following rates of return:

Deep cycle = 28%

Wet/flooded = 42%

Lithium ion = 19%

The initial investment required for each project is $200,000, $100,000, and $400,000, respectively. If Amigo’s MARR is 15% per year and it invests in all three projects, what rate of return will the company make?

MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...

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