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Required information Use the following information for the Quick Study below. [The following information applies to the questions displayed below.) Project A requires a $360,000
Required information Use the following information for the Quick Study below. [The following information applies to the questions displayed below.) Project A requires a $360,000 initial investment for new machinery with a five- year life and a salvage value of $47,000. The company uses straight-line depreciation. Project A is expected to yield annual net income of $27,700 per year for the next five years. QS 24-6 Accounting rate of return LO P2 Compute Project A's accounting rate of return. Accounting Rate of Return Choose Denominator: Choose Numerator: T = Accounting Rate of Return = Accounting rate of return canol Accounts receivable Annual after-tax net income Annual average investment Annual pre-tax income Accounting Rate of Return Choose Denominator: Choose Numerator: T = Accounting Rate of Return = | Accounting rate of return UUTUULLUTULIULIULUI nonal Average total assets Cost of goods sold Current assets Current liabilities Net sales Accou Che Choose Numerator: 7 Donnal Cost of goods sold Current assets Current liabilities Net sales Total assets QS 24-6 Accounting rate of return LO P2 Compute Project A's accounting rate of return. Accounting Rate of Return Choose Denominator: Choose Numerator: I = Accounting Rate of Return = | Accounting rate of return 0 360,000/ Accounts receivable Annual after-tax net income Annual average investment Annual pre-tax income Average total assets Cost of goods sold Accounting Rate of Return Choose Denominator: Choose Numerator: = Accounting Rate of Return Accounting rate of return 360,000/ Cost of goods sold Current assets Current liabilities Net sales Total assets
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