Answer:
The average return of the project is 15%
paybakc 6.67 years
Explanation:
Sean should divide the anual profit over the project cost ot get the average return
[tex]\frac{income}{investment} = $rate of return[/tex]
30,000 / 200,000 = 0.15
0.15 = 15%
Sean may also want to know the payback period:
so we do investment / income:
200,000 / 30,000 = 6.67
The firm will recover the cost of 200,000 after 6.67 years
