Third State Bank Wants to Add a New Branch Office

Multiple Choice

Third State Bank wants to add a new branch office.It has determined that the cost of construction of the new facility will be $1.5 million with another $500,000 in organizational costs.The bank has estimated that it will generate $319,522 per year in net revenues.If the new branch is expected to last 20 years,what is the expected rate or return on this investment? (Round to the nearest whole percent)

A) 6 percent
B) 21 percent
C) 15 percent
D) 32 percent
E) 25 percent