1otal Investment in the Projectration :A project requires an investment of 7.20.000 and a scrap value of 20,000 after five years. It is expectedto yield profits after depreciation & taxes during five years amounting to 65,000; 25.000: 80.000,3 70,000 and 90,000. Calculate the average rate of return on the investment.tion:

Average Rate of Return Method : In this method first average profits is computed then this amount…

A project requires an investment of 7.20.000 and a scrap value of 20.000 after five years. It is expecied to yield proftits after depreciation & taxes during five vears amounting to ? 65,000; 25,000: 80.000. * 70,000 and R 90,000. Calculate the average rate of return on the investment.

A project requires an investment of 7.20.000 and a scrap value of 20.000 after five years. It is expecied to yield proftits after depreciation & taxes during five vears amounting to ? 65,000; 25,000: 80.000. * 70,000 and R 90,000. Calculate the average rate of return on the investment.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 27P

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

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1otal Investment in the Project
ration :
A project requires an investment of 7.20.000 and a scrap value of 20,000 after five years. It is expected
to yield profits after depreciation & taxes during five years amounting to 65,000; 25.000: 80.000,
3 70,000 and 90,000. Calculate the average rate of return on the investment.
tion:

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