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The Crystal Company uses straight-line depreciation and is considering a capital expenditure for which the following relevant cash flow data have been estimated Estimated useful
The Crystal Company uses straight-line depreciation and is considering a capital expenditure for which the following relevant cash flow data have been estimated Estimated useful life 3 years Initial investment $400,000 Savings year 1 $160,000 Savings year 2 $150 000 Savings year 3 590,000 Residual value after 3 yrs $30,000 The accounting rate of return is closest to and if accounting rate of return is used to make the decision and the company desires a return of 5% the decision would be to O A. 6.67% and accept investing in the capital expenditure OB 250%, reject investing in the capital expenditure OC.0% and reject investing in the capital expenditure OD 33.33% and accept investing in the capital expenditure
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