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27 May, 03:31

Alma recently purchased a mexican restaurant for $450,000 from which she expects to earn a monthly profit of $1,500. her expected annual rate of return is: 8 percent 4 percent 10 percent 6 percent

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  1. 27 May, 04:42
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    Alma expects a monthly profit of $1,500. It means that her annual profit would be:

    $1,500 * 12 = $18,000

    Therefore:

    18,000 : 450,000 = x : 100

    450,000 x = 1,800,000

    x = 1,800,000 : 450,000 = 4%

    Answer:

    Here expected annual rate of return is: B) 4 percent.
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