Question
Transport Ltd is considering fitting a mounted forklift to each of its five delivery trucks. They have decided to base their decision on the accounting
Transport Ltd is considering fitting a mounted forklift to each of its five delivery trucks. They have decided to base their decision on the accounting rate of return and provide you with the following information:
The cost of the mounted forklifts will be €95,000 and they are expected to have a five year life with a scrap value of €5,000. The purchase of the forklifts is expected to result in a
€10,000 cash inflow in the first year and cash inflows of €40,000, €40,000, €60,000 and
€45,000 in years two to five respectively. Determine the forklifts accounting rate of return.
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Intermediate Accounting
Authors: James D. Stice, Earl K. Stice, Fred Skousen
17th Edition
032459237X, 978-0324592375
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