Fin 534 | Business & Finance homework help
The incremental profit is the difference between the revenue generated by a new project and the cost of that project. To calculate this, one must subtract all costs associated with the project (start-up costs, operating expenses, etc.) from total revenues earned from selling products or services related to that particular project.
The expected rate of return for a given year can be calculated using the following formula:
Expected Rate of Return = [(Project Profits / Total Project Costs) – 1] x 100