ebook 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 coppet The equipment will cost $3,600,000 and have a le of 5 years with no expected salvage value. The expected cash flows associated with the project are as follows: Year Cash Revenues Cash Expenses 1 $6,000,000 $4,000,000 2 6,000,000 4,800,000 3 1,000,000 4,800,000 6,000,000 4,000,000 0,000,000 4,000,000 b. Emily Haven is considerinvesting in one of the following two proje Other project will require an witment of $75,000. The expected chreven Chap for the two projects follow. Assume each project is deprecate Year Project Project 522,500 $22.500 2 30,000 30,000 3 45,000 45,000 4 75,000 22,500 75,000 22,500 Suppose that a project has an ARR of 30 Chased on initial investment and that the average net income of the project is $120.000 d. Suppose that a project has an AR of 50% and that the investment is $150,000 Required: 1 Previous Next Check My Work Required: 1. Compute the ARR on the new equipment that Cobre Company is considering. Round your answer to one decimal place 13.33 X 2. Conceptual Connection: Which project should Emily Hansen choose based on the ARR? Notice that the payback period is the same for both investments (thus equally entered) Unlike the payback period, explain why ARR correctly signals that one project should be derred over the other ARR Project A 66 X Project 38 x Based on the ARA, Emily Hansen chosen Project 3. How much did the company in Sicario invest in the project) 566,667 X 4. What is the average net income earned by the project in Sonce ? 87,500 x Check My W Partially connect Check My Work Previous Next >