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Note: I'm pretty sure that none of the choices are the right answer to the question. I know that ARR = average annual operating income
Note: I'm pretty sure that none of the choices are the right answer to the question. I know that ARR = average annual operating income / average amount invested.
Would average annual operating income (the numerator) be calculated as (130,000 x 5) - (475000) / 5 ?
Thank you
4. Suppose Francine Dunkelberg's Sweets is considering investing in warehouse- management software that costs $550,000, has $75,000 residual value, and should lead to cost savings of $130,000 per year for its five-year life. What is the accounting rate of return? A. 20.8% B. 27.4% C. 41.6% D. 54.7%Step by Step Solution
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