Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Need some assistance Average Rate of Return The average rate of return Is another method that does not use present value and is commonly used

Need some assistance

image text in transcribed
Average Rate of Return The average rate of return Is another method that does not use present value and is commonly used in making caoital Investment decisions. Unlike the cash payback method, the average rate of return focuses on Income rather than cash flow. Assume that the Investment Involves an Initial outlay of $100,000 with a veeyear useful life and no salvage value under straIghteline depreciation. The revenues are as follows: Year 1 , $20,000, Year 2 , $30,000, Year 3 $40,000, Year 4 - $50,000 and Year 5 $60,000. Use the mInus sign to indIcate a net loss. If an amount is zero, enter "".0 Year Revenues Expenses Net Income Year 1 Net Income (loss) \" UUUUE Year 2 Net Income (loss) Year 3 Net Income (loss) Year 4 Net Income (loss) : Year 5 Net Income (loss) : Total Net Income (five years) : E DEM DEM Average Net Income = Average Rate of Return : I: :f :f

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial And Management Accounting An Introduction

Authors: Pauline Weetman

8th Edition

1292244410, 978-1292244419

More Books

Students also viewed these Accounting questions

Question

2. Follow through with fair consequences.

Answered: 1 week ago