Answer :
Answer:
-20.9%
Explanation:
To calculate the approximate rate of return for the project over the two-year period, we can use the formula for rate of return (RoR):
[tex]RoR=(\frac{Total revenue-Total Cost}{Total cost} )*100%[/tex]
Given:
Total cost of the project = $50,600
Total revenue from the project over 2 years = $20,000 + $20,000 = $40,000
Now, substitute these values into the formula:
[tex]RoR=(\frac{40,000-50,600}{50,600} )*100%[/tex]
[tex]RoR=(\frac{-10,600}{50,600} )*100%[/tex]
[tex]RoR=-0.209*100%[/tex]
[tex]RoR=-20.9%[/tex]
Since the calculated rate of return is negative, it indicates a loss on the project rather than a return. Therefore, none of the provided options (5.4%, 10.8%, 2.7%, 7.4%) are correct for this scenario.
So, the approximate rate of return for the project over this two-year period is approximately -20.9%.
