Engineering Economy
Engineering Economy
8th Edition
ISBN: 9780073523439
Author: Leland T Blank Professor Emeritus, Anthony Tarquin
Publisher: McGraw-Hill Education
Question
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Chapter 7, Problem 1P
To determine

Possible rate of return.

Expert Solution & Answer
Check Mark

Explanation of Solution

Option (a):

The possible highest rate of return is infinitive. The reason is that a firm can earn more and more of earning. The maximum earning cannot be determined.

Option (b):

The lowest possible rate of return is -100%. The reason is that the firm will lose all the investment which is equal 100%.

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