Swagelok Co. of Solon, Ohio, makes variable area flow meters (VAFs) that measure liquid and gas flow

Question:

Swagelok Co. of Solon, Ohio, makes variable area flow meters (VAFs) that measure liquid and gas flow rates by means of a tapered tube and float. If tooling and setup costs were $400,000 in year 0 and an additional $190,000 in year 3, determine the external rate of return using the modified rate of return approach.
The revenue was $160,000 per year in years 1 through 10. Assume the company's is 20% per year and its is 9% per year.

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... Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...