Compute the prospective rate of return before taxes

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A project has an initial cost of $150,000 and an estimated salvage value after 13 years of $90,000. Estimated average annual receipts are $27,000. Estimated average annual disbursements are $16,000. Assuming that annual receipts and disbursements will be uniform and compute the prospective rate of return before taxes.

A) 4.6%

B) 5.8%

C) 3.5%

D) 5.1%

Reference no: EM13721865

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