Required information [The following information applies to the questions displayed below.] Project Y requires a $325,500 investment for new machinery with a four-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year, (PV of $1. EV of $1. PVA of $1. and EVA of 5) (Use appropriate factor(s) from the tables provided.) Annual Amounts Sales of new product Expenses Materials, labor, and overhet (except depreciation) Project Y Depreciation-Machinery Selling, general, and administrative expenses Income 3. Compute Project Y's accounting rate of return. Numerator: Accounting Rate of Return Denominator: Project Y $360,000 161,200 81,375 26,000 $91,345 Accounting Rate of Return 0

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 15P
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Required information
[The following information applies to the questions displayed below.]
Project Y requires a $325,500 investment for new machinery with a four-year life and no salvage value. The project yields
the following annual results. Cash flows occur evenly within each year. (PV of $1. EV of $1. PVA of $1. and EVA of $1) (Use
appropriate factor(s) from the tables provided.)
Annual Amounts
Sales of new product
Expenses
Project Y
Materials, labor, and overhe (except depreciation)
Depreciation-Machinery
Selling, general, and administrative expenses
Income
3. Compute Project Y's accounting rate of return.
Numerator:
Accounting Rate of Return
Denominator:
1
Project Y
$360,000
161,280
81,375
26,000
$ 91,345
Accounting Rate of Return
Transcribed Image Text:! Required information [The following information applies to the questions displayed below.] Project Y requires a $325,500 investment for new machinery with a four-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1. EV of $1. PVA of $1. and EVA of $1) (Use appropriate factor(s) from the tables provided.) Annual Amounts Sales of new product Expenses Project Y Materials, labor, and overhe (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income 3. Compute Project Y's accounting rate of return. Numerator: Accounting Rate of Return Denominator: 1 Project Y $360,000 161,280 81,375 26,000 $ 91,345 Accounting Rate of Return
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