Five years ago, "Your Business or Mine" invested $530,000 in a fully automated manufacturing line and
recorded an increase of $105,000 per year for five years in its revenue. The equipment salvage value at
present is $50,000.
a) What is the rate of return per year on the investment? (5 points)
b) The company's CEO expected to make at least 15% per year on this fully automated manufacturing
system. What annual revenues were necessary to meet the 15% goal? (5 points)