Accounting Rate of Return

Each of the following scenarios is independent. Assume that all cash flows are after$-$tax cash flows.

a$.$ Cobre Company is considering the purchase of new equipment that will speed up the process for extracting copper. The equipment will cost $$3,600,000$ and have a

life of $5$ years with no expected salvage value. The expected cash flows associated with the project are as follows:

b$.$ Emily Hansen is considering investing in one of the following two projects. Either project will require an investment of $$75,000.$ The expected cash revenues minus

cash expenses for the two projects follow. Assume each project is depreciable.

c$.$ Suppose that a project has an ARR of $30\%($based on initial investment$)$ and that the average net income of the project is $$120,000.$

d$.$ Suppose that a project has an ARR of $50\%$ and that the investment is $$150,000.$

Required: