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Roopali is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $60,000 Initial investment-working capital 6,000 Net cash inflows from operations (per
Roopali is considering an investment proposal with the following cash flows:
Initial investment-depreciable assets | $60,000 |
Initial investment-working capital | 6,000 |
Net cash inflows from operations (per year for 10 years) | 11,000 |
Disinvestment-depreciable assets | 5,000 |
Disinvestment-working capital | 2,000 |
For parts b. and c., round answers to three decimal places, if applicable.
a. Determine the payback period.
b. Determine the accounting rate of return on initial investment
c. Determine the accounting rate of return on average investment
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