Question
Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows with Disinvestment Minn is considering an investment proposal with the following cash flows:
Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows with Disinvestment Minn is considering an investment proposal with the following cash flows:
| Initial investment-depreciable assets | $125,000 |
| Net cash inflows from operations (per year for 10 years) | 25,000 |
| Disinvestment-depreciable assets | 27,000 |
For parts b. and c., round answers to three decimal places, if applicable.
a. Determine the payback period. Answer
years
b. Determine the accounting rate of return on initial investment. Answer
c. Determine the accounting rate of return on average investment. Answer
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Basic Accounting Concepts Principles And Procedures Volume 1
Authors: Gregory Mostyn, Worthy And James
2nd Edition
0991423100, 978-0991423101
