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Raisons Reels Pty Ltd is considering investing in the purchase of new equipment The equipment will cost $350 000 There will be net cash inflows
Raisons Reels Pty Ltd is considering investing in the purchase of new equipment The equipment will cost $350 000 There will be net cash inflows in each of the three years of: Year 1: $140 000, Year 2: $160 000 and Year 3: $122 000 The equipment is thought to have a residual value of $60 000 at the end of year 3 The required rate of return (RRR) is 14% 1. What is the Total Depreciation? 2. Calculate the Average profit? 3. What is the value of the Average Investment? 4.The Accounting Rate of Return (ARR) for this investment is: 5. Which of the following statements is true regarding the decision rule for ARR? 6. A qualitative feature of investments is
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