Question
A firm is considering a project with an initial cash outlay of AED 250,000 and no residual value. The project is expected to provide incremental
A firm is considering a project with an initial cash outlay of AED 250,000 and no residual value. The project is expected to provide incremental net income (revenues - expenses) over the next five years of the following amounts: (all amounts in AED)
| Year 1 | 12,000 |
| Year 2 | 18,000 |
| Year 3 | 26,000 |
|
|
|
| Year 4 | 24,000 |
| Year 5 | 20,000 |
| TOTAL | 100,000 |
Calculate its accounting rate of return assuming that there are no other expenses on the project.
| Year 1 | 12,000 |
| Year 2 | 18,000 |
| Year 3 | 26,000 |
|
|
|
| Year 4 | 24,000 |
| Year 5 | 20,000 |
| TOTAL | 100,000 |
Calculate its accounting rate of return assuming that there are no other expenses on the project.
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World Finance Since 1914
Authors: Paul Einzig
1st Edition
0415539471, 978-0415539470
