Question: Singular Construction is evaluating whether to build a new distribution facility. The proposed investment will cost Singular $2 million to construct and provide cash savings

Singular Construction is evaluating whether to build a new distribution facility. The proposed investment will cost Singular $2 million to construct and provide cash savings of $500,000 per year over the next ten years. Also, assume Singular invested another $200,000 in the facility at the end of five years, it would extend the project life by four years, and the cash savings remained $500,000. What rate of return does the investment offer?

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