Question
(Present value tables are needed.) Mulheim Corporation is deciding whether to automate one phase of its production process. The equipment has a six year life
(Present value tables are needed.) Mulheim Corporation is deciding whether to automate one phase of its production process. The equipment has a six year life and will cost $410,000. Projected net cash inflows from the equipment are as follows:
| Year 1 | $ 120,000 |
| Year 2 | $ 100,000 |
| Year 3 | $ 110,000 |
| Year 4 | $ 100,000 |
| Year 5 | $ 95,000 |
| Year 6 | $ 90,000 |
Mulheim Corporation's hurdle rate is 12%. Assume the residual value is zero.
The accounting rate of return is (Hint: Find the net present value of the equipment)?
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Auditors Guide To Information Systems Auditing
Authors: Richard E. Cascarino
1st Edition
0470009896, 978-0470009895
