Question
40. When calculating the annual rate of return, the average investment is equal to (initial investment plus salvage value) divided by 2. initial investment divided
40. When calculating the annual rate of return, the average investment is equal to
(initial investment plus salvage value) divided by 2.
initial investment divided by 2.
initial investment divided by life of project.
(initial investment plus $0) divided by 2.
39Net annual cash flow can be estimated by
deducting credit sales from net income.
adding advertising expense to net income.
adding depreciation expense to net income.
deducting credit purchases from net income.
38Bramble, Inc. is considering purchasing equipment costing $36000 with a 6-year useful life. The equipment will provide annual cost savings of $10600 and will be depreciated straight-line over its useful life with no salvage value. Bramble requires a 10% rate of return.
Present Value of an Annuity of 1 | ||||||
Period | 8% | 9% | 10% | 11% | 12% | 15% |
6 | 4.623 | 4.486 | 4.355 | 4.231 | 4.111 | 3.784 |
What is the approximate net present value of this investment?
$8848
$27600
$10163
$11552
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