Question
1b) Lana Ltd would like to buy a machine costing 50,000 and with a disposal value of 10,000. The machine is expected to last 5
1b) Lana Ltd would like to buy a machine costing 50,000 and with a disposal value of 10,000. The machine is expected to last 5 years and will bring into the company a total of 160,000 in Net Cash Flows.
Complete the following table to calculate the Accounting Rate of Return (ARR) for this machine.
| Total Cashflows |
| Total Depreciation |
| Total Profit |
| Average annual profit |
|
|
| Average investment |
| ARR % |
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Internal Auditing Assurance & Advisory Services
Authors: Urton L. Anderson, Michael J. Head, Sridhar Ramamoorti, Cris Riddle, Mark Salamasick, Paul J. Sobel
4th Edition
0894139878, 978-0894139871
