Question: An investigation of a proposed investment has been made. The following result has been presented to management: The minimum payout period based on capital recovery

An investigation of a proposed investment has been made. The following result has been presented to management:

The minimum payout period based on capital recovery using a minimum annual return of 10 percent as a fictitious expense is 10 years; annual depreciation costs amount to 8 percent of the total investment. Using this information, determine the standard rate of return on the investment.

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