Question
ABC, Inc is considering investing $4,000,000 in a project that is expected to generate $260,000 in annual net income for the next six years Depreciation
ABC, Inc is considering investing $4,000,000 in a project that is expected to generate $260,000 in annual net income for the next six years Depreciation expense on the projects assets is $170,000 per year Management would like its acceptable rate of return to be 18, and its acceptable payback period to be 3 years.
A) Calculate the accounting rate of return Based on your result, should this project be accepted and Why?
B) Calculate the payback period Based on your result, should this profit?
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Practical financial management
Authors: William r. Lasher
5th Edition
0324422636, 978-0324422634
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