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Swift Oil Company is considering investing in a new oil well. It is expected that the oil well will increase annual revenues

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Answer #1

Answer- Annual rate of return =20.18%.

Explanation- Annual rate of return = Annual income/Average Investment*100

                                                         =$44000/$218000*100

                                                          =20.18%

Where:-

Annual income =Annual revenues – Annual expenses

                          =$132000-$88000 =$44000

Average Investment =($427000+$9000)/2

                                  =$218000

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