Question
Rapp Hardware is adding a new product line that will require an investment of $1,454,000. Managers estimate that this investment will have a 10-year life
Rapp Hardware is adding a new product line that will require an investment of
$1,454,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of
$300,000 the first year, $290,000 the second year, and $260,000 each year thereafter for eight years. Assume the project has no residual value. Compute the ARR for the investment. Round to two places.
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Part 1
Select the formula, then enter the amounts to calculate the ARR (accounting rate of return) for the new product line. (Round ARR to the nearest hundredth percent [two decimal places], X.XX%.)
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| = | ARR | ||
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| = |
| % |
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