King Motors manufactures Engine equipment, and they are planning on introducing a new product which would require an initial investment of $7 million in assets and would produce a net annual revenue of $1.1 million over a service life of 8 years. After the 8 years, the product will likely become obsolete, and the assets would be sold for an estimated $0.6 million. What is the rate of return of this project? And would it be an acceptable project with the MARR = 7%?
