Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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3. Compute Project Y’s accounting rate of return.

The numerator drop down options are: accounts receivable, annual income, average investment, average total assets, cost of goods sold, current assets, current liabilities, net sales, total assets

The denominator dropdown options are: accounts receivable, annual income, average investment, average total assets, 

Project Y requires a $345,000 investment for new machinery with a six-year life and no salvage value.
The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1,
FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)
Project Y
$ 355,000
Annual Amounts
Sales of new product
Expenses
Materials, labor, and overhead (except depreciation)
Depreciation-Machinery
Selling, general, and administrative expenses
159,040
57,500
25,000
$ 113,460
Income
3. Compute Project Y's accounting rate of return.
Accounting Rate of Return
Numerator:
Denominator:
Accounting Rate of Return
%3D
Project Y
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Transcribed Image Text:Project Y requires a $345,000 investment for new machinery with a six-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Project Y $ 355,000 Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses 159,040 57,500 25,000 $ 113,460 Income 3. Compute Project Y's accounting rate of return. Accounting Rate of Return Numerator: Denominator: Accounting Rate of Return %3D Project Y
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