A research project would require initial investment of 100,000. There are three possible outcomes for this project:
1) 30% probability that investment yields annual income of 35,000 for six year (starting from year 1 to year six) and zero salvage value
2) 50% probability that investment yields annual income of 25,000 for six year (starting from year 1 to year six) and zero salvage value
3) 20% probability of failure that yields zero annual income but salvage value of 75,000 dollar at the end of year 1
Calculate expected Rate of Return for this investment. Explain your work in detail including all the required equations and calculations.