Average Rate of Return The following data are accumulated by Lone Peak Inc. in evaluating two competing capital investment proposals: 3D Printer Truck Amount of investment $64,000 $48,000 Useful life 4 years 5 years Estimated residual value Estimated total income over the useful life $5,120 $9,600 Determine the expected average rate of return for each proposal. If required, round your answers to one decimal place. 3D Printer % Truck %

The question is related to Expected Average rate of return. The expected average rate of return is calculated as under Expected Average rate of return = Average Annual Income × 100 1/2 Inital Investment Calculation of Annual Expected rate of return Expected Average rate of return = Average Annual Income × 100 1/2 Inital Investment 3D Printer Expected Average rate of return = $5120 ÷ 4 × 100 1 × $64000 2 = $1280 × 100 $32000 Expected Average rate of return = 4% Truck Expected Average rate of return = $9600 ÷ 5× 100 1 × $48000 2 = $1920 × 100 $24000 Expected Average rate of return = 8%

Answered: Average Rate of Return The following data are accumulated by Lone Peak Inc. in evaluating two competing capital investment proposals: 3D Printer Truck Amount of…

FINANCIAL ACCOUNTING

10th Edition

ISBN: 9781259964947

Author: Libby

Publisher: MCG

See similar textbooks

Related questions

Q: THE SMITH COMPANY Using the business transactions below, complete T-accounts for the Smith Company.…

A: T Accounts 1. Cash Account Particular Debit Particular Credit To capital A/c…

Q: Can solve question 4 to 7?

A: Salary of the Darnell Johnson = 63500Contribution by his employer toward the retirement plan = 6% of…

Q: Question 8

A: When net credit sales is divided with average accounts receivable it results in receivable turnover…

Q: the difference between a W-4 form and W-2 form.

A: Form W-4: Employee’s withholding allowance certificate. This form is filled by employees for their…

Q: Carefully explain the cross-sectional test of the CAPM.

A: The Capital Asset Pricing Model (CAPM) is a mathematical model that describes the relationship…

Q: ratio of 3 pays a $138,000 short terms liability. the amount of working capital immediately after…

A: The working capital is calculated as difference between current assets and current liabilities. The…

Q: Topic is Interests If A(t) = 100(1.1)t Find: a. i5 b. i10 Show complete solution with explanatio

Q: 7. How would you define transaction exposure? How is it different from economic exposure?

A: Exposure refers to the degree to which an individual or entity is subject to a particular risk or…

Q: Define Volcker rule

A: Volcker Rule is a regulation that implies restrictions on the banks to involve in the stock market…

Q: What the agi

A: AGI means Adjusted Gross Income. It is the total income on which income tax payable would be…

Q: Explain- Agency cost.

Q: Describe about the NOL.

A: NOL means Net Operating Loss. This is a situation when company's deductions are more than it's…

Q: LO 7.4 Name the four main special journals.

A: Please see the next step for the solution

Q: what is 2 plus eight ?

A: The given sentence "2 plus eight" can be symbolically represented as 2+8. Thus, 2+8 is 10.

Q: A. For what values of x is f(x) NOT y 00 6 4 2 X -3-2-10 1 2 3 4 5

A: Step 1:So, how do you know if a function is differentiable?Well, the easiest way to determine…

Q: What about requirement 4+5

A: Since only requirement 4 and 5 is asked I am not solving the 6th requirement.For solution one…

Q: what about quesitons E and F?

A: Work in progress (WIP) also called work in process, is inventory that has begun the manufacturing…

Q: D nctions Question 10 Use the diagram below to find each of the following: sine of point a • cose of…

A: Refer to the attached image for the detailed solution:

Question

100%

Average Rate of Return
The following data are accumulated by Lone Peak Inc. in evaluating two competing capital investment proposals:
3D Printer Truck
Amount of investment
$64,000
$48,000
Useful life
4 years
5 years
Estimated residual value
Estimated total income over the useful life
$5,120
$9,600
Determine the expected average rate of return for each proposal. If required, round your answers to one decimal place.
3D Printer
%
Truck
%

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution

See solution Check out a sample Q&A here

Step 1Basic Information

VIEW

Step 2 Solution

VIEW

Similar questions

What is the solution to 0.5x - 2 < 5.5? O A. X < 7 о В. х< 9 С. X < 13 D. x < 15

Recommended textbooks for you

FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education