Asked by Devante Starks on Jun 30, 2024

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The average rate of return for this investment is

A) 5%
B) 10.5%
C) 25%
D) 15%

Average Rate of Return

A financial ratio that indicates the profitability of an investment by calculating the average annual profits divided by the initial investment cost.

Present Value Factor

A factor used to determine the present value of a sum that is to be received in the future, taking into account a specific interest rate and time period.

  • Determine and examine the average profit ratio for an investment.
  • Implement knowledge of present value criteria in determining the attractiveness of investment opportunities.
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VG
vishesh goyalJul 03, 2024
Final Answer :
B
Explanation :
The average rate of return is calculated based on the formula for average return, which typically involves summing up the yearly returns and dividing by the number of years. Without specific numbers provided for the investment's performance over time, the correct answer cannot be determined from calculation alone. However, given the options, 10.5% is chosen as the correct answer based on the assumption that this question is related to a specific context or example where 10.5% is the calculated average rate of return.