Answered step by step
Verified Expert Solution
Question
1 Approved Answer
ABC Corp. invests $500,000 this year in a three-year project. The investment will have the salvage value of $50,000. The performance of the project over
ABC Corp. invests $500,000 this year in a three-year project. The investment will have the salvage value of $50,000. The performance of the project over the three-year span was as follows: At Year 1, the project had $260,000 in revenues, $35,000 in costs of goods sold, $32,000 in other operating expenses, and $21,000 in interest payments. The tax rate was 21%. At Year 2, the project had $280,000 in revenues, $43,000 in costs of goods sold, $30,000 in other operating expenses, and $21,000 in interest payments. The tax rate was 21%. At Year 3, the project had $290,000 in revenues, $42,000 in costs of goods sold, $33,000 in other operating expenses, and $22,000 in interest payments. The tax rate was 21%. What is this project's average accounting return during the three-year span? HINT: Be sure to set up your depreciation expenses based on the duration of the project. 9.67% 10.64% 13.47% 10.91% Question 15 2.5 pts Same facts as above: what is the average accounting return of this project if the salvage value is $0 (that is, rather than $50,000 )? 9.02%5.51%5.37%6.80%
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started