For projects A and B determine the payback period(PBP) and the Account rate of return (ARR). The unit cost is (RO) 350. v) Project-A 355,000 15 Project-B 450,200 15 Description Capital (RO) Life (years) Capacity (units per year) Salaries per year (RO) Other fixed costs per year (RO) Wages per year (RO) Cost of materials per year (RO) Other variable costs per year (RO) Scrap value at the end of the year (RO) Cost of capital (%) 10,000 45,000 40,000 70,000 229 000 35,000 31,700 15 12,000 50,000 85,000 80,000 279,000 40,000 43,700 15

For projects A and B determine the payback period(PBP) and the Account rate of return (ARR). The unit cost is (RO) 350. v) Project-A 355,000 15 Project-B 450,200 15 Description Capital (RO) Life (years) Capacity (units per year) Salaries per year (RO) Other fixed costs per year (RO) Wages per year (RO) Cost of materials per year (RO) Other variable costs per year (RO) Scrap value at the end of the year (RO) Cost of capital (%) 10,000 45,000 40,000 70,000 229 000 35,000 31,700 15 12,000 50,000 85,000 80,000 279,000 40,000 43,700 15

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 1BE: Average rate of return Determine the average rate of return for a project that is estimated to yield...

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