Question
A capital investment project is estimated to have the following cash flows, by year: Year 0 1 2 3 4 NI 0 1,438 650 1,125
A capital investment project is estimated to have the following cash flows, by year:
| Year | 0 | 1 | 2 | 3 | 4 |
|---|---|---|---|---|---|
| NI | 0 | 1,438 | 650 | 1,125 | 2,345 |
| CF | -85,000 | 28,548 | 22,800 | 26,349 | 52,300 |
The company utilizes a discount rate of 15% to evaluate capital projects and has an average book value of $7,500. You may have rounding errors in your calculations so choose the closest answer. Assume cash flows are received equally over the year.
What is the average accounting return of the project?
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Microfinance Handbook An Institutional And Financial Perspective
Authors: Joanna Ledgerwood
1st Edition
0821343068, 978-0821343067
