Multiple Choice$40,850$63,450$31,725$61,900$65,000 The following relates to a proposed equipment purchase:Cost$126,900Salvage value$ 3,100Estimated useful life4 yearsAnnual net cash flows$ 45,200Depreciation methodStraight-lineThe annual average investment amount used to calculate the accounting rate of return is:Multiple Choice$40,850$63,450$31,725$61,900

ARR (Accounting ROR) is a traditional method which is used to evaluate various projects. It doesn’t considers time factor of money. ARR=Average ReturnAverage Inestment×100 Calculate Average Investment as below: Average Investment=Value at Begining+Value at End2=$126,900+$3,1002=$130,0002=$65,000 Hence, Average Investment is $65,000 The correct option is “fifth”.

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The following relates to a proposed equipment purchase: Cost $126,900 Salvage value Estimated useful life 3,100 4 years Annual net cash flows $ 45,200 Straight-line Depreciation method The annual average investment amount used to calculate the accounting rate of return is:

The following relates to a proposed equipment purchase: Cost $126,900 Salvage value Estimated useful life 3,100 4 years Annual net cash flows $ 45,200 Straight-line Depreciation method The annual average investment amount used to calculate the accounting rate of return is:

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The expected average rate of return for a proposed investment of $446,000 in a fixed asset with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total income of $379,840 for the 4 years is (round to two decimal places) a.0.85% b.1.70% c.21.29% d.42.58%
The expected average rate of return for a proposed investment of $5,090,000 in a fixed asset, using straight-line depreciation, a useful life of 20 years, no residual value, and an expected total income of $10,180,000 over the 20 years, is (round to two decimal places) a.20.00% b.1.00% c.10.00% d.40.00%
ZLX is evaluating an investment and has generated the following: Initial investment at time t=0 is $2,000,000 Life of project is 8 years Initial investment depreciated to $0 via straight-line over entire life NWC investment required = $0.00 Expected market salvage value of investment assets = $0.00 Starting 1-year from today, and remaining constant over project life: Incremental sales as a result of investment = $1,600,000 / year Incremental expenses as a result of investment = $1,100,000 / year firm' tax rate = 28% What is the IRR of this investment? Enter rate in decimal form, rounded to fourth digit, as in "0.1234"
Please read instructions and answer each question show work.
Consider two air-conditioning systems with the cash flow estimates as given below. Use AW analysis to determine the sensitivity of the economic decision to MARR values of 4%, 6%, and 8% per year. Air-Conditioning System 1 System First cost, $ AOC, $ per year Salvage value, $ New compressor and motor cost at midlife, $ Life, years -10,000 -500 -100 -1,850 8 The annual worth of air-conditioning system 1 when the MARR is 4% is $ The annual worth of air-conditioning system 2 when the MARR is 4% is $ The annual worth of air-conditioning system 1 when the MARR is 6% is $ The annual worth of air-conditioning system 2 when the MARR is 6% is $ The annual worth of air-conditioning system 1 when the MARR is 8% is $ The annual worth of air-conditioning system 2 when the MARR is 8% is $ Air-Conditioning System 2 -14,000 -85 -300 -2,540 12
The information below relates to the purchase of equipment: investment in the project: $10,000 Net annual cash inflows: 2,400 Working capital required: 5,000 Salvage value of the equipment: 1,000 Life of the project: 8 years At the completion of the project, the working capital will be released for use elsewhere. Compute the net present value of the project, using a discount rate of 10% $606 $8,271 ($1,729) $1,729
please detail solution and explnation
The expected average rate of return for a proposed investment of $652,000 in a fixed asset, with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total net income of $241,000 for the 4 years, is: a. 13.90% b. 9.24% c. 36.96% d. 18.48%
Help please The following details relate to a particular asset Future Cash flows (per annum) 90,000 Expected period of cash flows 3 years Discount Rate 10% Open market price of asset 210,000 Cost of asset 630,000 Accumulated depreciation 450,000 Calculate both : a)determine the recoverable amount for this asset b)Determine whether the asset is impaired
The expected average rate of return for a proposed investment of $786,000 in a fixed asset, with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total net income of $282,000 for the 4 years, is (round to two decimal points). a.35.88% b.8.97% c.13.90% d.17.94%
I will rate. Solve correctly and show all works.
The expected average rate of return for a proposed investment of $4,860,000 in a fixed asset, using straight-line depreciation, a useful life of 20 years, no residual value, and an expected total income of $9,720,000 over the 20 years, is (round to two decimal places) a.1.00% b.20.00% c.40.00% d.10.00%

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