Information for two alternative projects involving machinery investments follows: Project 1 Initial investment Salvage value Annual income $ (128,000) Ө Project 2 $ (98,000) 18,000 14,080 11,600 a. Compute accounting rate of return for each project. b. Based on accounting rate of return, which project is preferred? Complete this question by entering your answers in the tabs below. Required A Required B Compute accounting rate of return for each project. Project 1 Project 2 Numerator: Accounting Rate of Return Denominator: Required A Required B Based on accounting rate of return, which project is preferred? Based on accounting rate of return, is preferred. = Accounting rate of return
Information for two alternative projects involving machinery investments follows: Project 1 Initial investment Salvage value Annual income $ (128,000) Ө Project 2 $ (98,000) 18,000 14,080 11,600 a. Compute accounting rate of return for each project. b. Based on accounting rate of return, which project is preferred? Complete this question by entering your answers in the tabs below. Required A Required B Compute accounting rate of return for each project. Project 1 Project 2 Numerator: Accounting Rate of Return Denominator: Required A Required B Based on accounting rate of return, which project is preferred? Based on accounting rate of return, is preferred. = Accounting rate of return
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Information for two alternative projects involving machinery investments follows:
Project 1
Initial investment
Salvage value
Annual income
$ (128,000)
Ө
Project 2
$ (98,000)
18,000
14,080
11,600
a. Compute accounting rate of return for each project.
b. Based on accounting rate of return, which project is preferred?
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute accounting rate of return for each project.
Project 1
Project 2
Numerator:
Accounting Rate of Return
Denominator:
Required A Required B
Based on accounting rate of return, which project is preferred?
Based on accounting rate of return,
is preferred.
=
Accounting rate of return
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