Posted by
**j** on
.

You have been given the following information on a project:

It has a 3-year lifetime

The initial investment in the project will be $28 million, and the investment will be depreciated straight line, down to a salvage value of $6 million at the end of the fourth year.

The revenues are expected to be $21 million next year and to grow 2% a year after that for the remaining two (0) years.

The cost of goods sold, excluding depreciation, is expected to be 55% of revenues.

Estimate the pre-tax return on capital, by year and on average, for the project.