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: