Question
Dartis Company is considering investing in a specialized equipment costing $670,000. The equipment has a useful life of 5 years and a residual value of
Dartis Company is considering investing in a specialized equipment costing $670,000. The equipment has a useful life of 5 years and a residual value of $67,000. Depreciation is calculated using the straightline method. The expected net cash inflows from the investment are given below.
| Year 1 | $208,000 |
| 2 | 156,000 |
| 3 | 167,000 |
| 4 | 104,000 |
| 5 | 135,000 |
| $770,000 |
What is the accounting rate of return on the investment?
A. 9.06%
B. 11.08%
C. 9.97%
D. 4.53%
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Auditing Quality Management Systems Keeping Your Quality Management System Relevant
Authors: Herne European Consultancy, Ray Tricker
1st Edition
0992758521, 978-0992758523
