mber Company is considering a one-year project that requires an initial investment of $500,000. However, to raise this capital, the company will incur flotation costs that are 2% of the initial investment amount. At the end of the year, the project is expected to produce a cash inflow of $576,000. What is the rate of return that the company expects to earn on this project after taking flotation costs into consideration?Your answer should be between 7.32 and 16.60, rounded to 2 decimal places, with no special characters. Your answer should be between 7.32 and 16.60, rounded to 2 decimal places, with no special characters

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...
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Amber Company is considering a one-year project that requires an initial investment of $500,000. However, to raise this capital, the company will incur flotation costs that are 2% of the initial investment amount. At the end of the year, the project is expected to produce a cash inflow of $576,000. What is the rate of return that the company expects to earn on this project after taking flotation costs into consideration?Your answer should be between 7.32 and 16.60, rounded to 2 decimal places, with no special characters. Your answer should be between 7.32 and 16.60, rounded to 2 decimal places, with no special characters. 

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