Question
Investment A Investment B Investment $680,000 $120,000 Useful life 10 years 10 years Estimated annual net cash inflows for 8 years $150,000 $27,000 Residual value
Investment A
Investment B
Investment
$680,000
$120,000
Useful life
10 years
10 years
Estimated annual net
cash inflows for 8 years
$150,000
$27,000
Residual value
$30,000
$0
Depreciation method
Straightline
Straightline
Required rate of return
14%
10%
What is the accounting rate of return for InvestmentA?
Group of answer choices
14%
12.1%
22.1%
12.5%
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Management Accounting
Authors: Kim Langfield Smith, Helen Thorne, David Alan Smith, Ronald W. Hilton
7th Edition
978-1760421144, 1760421146
