Question
McAfee Automobiles Manufacturing is considering two alternative investment proposals with the following? data: Proposal X Proposal Y Investment $ 10 comma 500 comma 000$10,500,000 $
McAfee Automobiles Manufacturing is considering two alternative investment proposals with the following? data:
Proposal X | Proposal Y | ||
Investment | $ 10 comma 500 comma 000$10,500,000 | $ 420 comma 000$420,000 | |
Useful life | 5 years | 5 years | |
Estimated annual net cash inflows for 5 years | $ 2 comma 100 comma 000$2,100,000 | $ 105 comma 000$105,000 | |
Residual value | $ 52 comma 000$52,000 | $ 34 comma 000$34,000 | |
Depreciation method | Straightminus?line | Straightminus?line | |
Required rate of return | 1414?% | 1414?% |
Calculate the accounting rate of return for Proposal Y.? (Round any intermediate calculations and your final answer to two decimal? places.)
A.
15.3815.38?%
B.
12.2512.25?%
C.
24.2524.25?%
D.
14.414.4?%
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