Barron chemical uses a thermoplastic polymer to enhance the appearance of certain rv panels. the initial cost of one process was $126,000 with annual costs of $45,000. revenues are $78,000 in year 1, increasing by $1000 per year. a salvage value of $20,000 was realized when the process was discontinued after 8 years. what rate of return did the company make on the process?

The company made a rate of return of 38.27%

Explanation:

The rate of return is a measure of the net gain or loss that an investment incurs over a given period of time. The rate of return can be calculated using the formula below

Rate of return={(Total revenue-total cost)/(Total cost)}×100

Total revenue per year are as follows;

Year 1=78,000, Year 2=(78,000+1,000)=79,000, Year 3=(78,000+2000)=80,000, Year 4=(78,000+3,000)=81,000, Year 5=(78,000+4,000)=82,000, Year 6=(78,000+5,000)=83,000, Year 7=(78,000+6,000)=84,000, Year 8=(78,000+7,000)=85,000

Total revenues=(78,000+79,000+80,000+81,000+82,000+83,000+84,000+85,00)=

$652,000

Salvage value=$20,000

Total revenue after 8 years=(652,000+20,000)=$672,000

Total cost=Initial cost+annual costs

Initial cost=$126,000

Annual costs=45,000

Total costs=126,000+(45,000×8)

Total costs=126,000+360,000=$486,000

Net revenue=Total revenue-total costs

replacing;

Net revenue=(672,000-486,000)=$186,000

Rate of return=(Net revenue/total cost)×100

Rate of return=(186,000/486,000)×100

The company made a rate of return of 38.27%

answermeasured by how well she or he does the job'; /

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.