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A Firm Has an Average Investment of $1,000 During the Year

Question 56

Multiple Choice

A firm has an average investment of $1,000 during the year. During the same time, the firm generates after-tax earnings of $150.
If the cost of capital is 10 percent, what is the net return on investment?


A) 10 percent
B) 5 percent
C) 12 percent
D) 15 percent

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