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Harvard Manufacturing Company is considering the following investment proposal: Initial investment: Depreciable assets (straight-line) $40,800 Working capital 3,400 Operations (per year for 4 years): Cash
Harvard Manufacturing Company is considering the following investment proposal:
Initial investment: | |
Depreciable assets (straight-line) | $40,800 |
Working capital | 3,400 |
Operations (per year for 4 years): | |
Cash receipts | $30,000 |
Cash expenditures | 17,000 |
Disinvestment: | |
Salvage value of equipment | $3,400 |
Recovery of working capital | 1,700 |
The investments accounting rate of return (rounded to two decimal points) on the original investment is:
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