Question

The expected average rate of return for a proposed investment of $776,000 in a fixed asset,...

The expected average rate of return for a proposed investment of $776,000 in a fixed asset, with a useful life of four years, straight-line depreciation, no residual value, and an expected total net income of $245,000 for the four years, is (round to two decimal points).

a.15.79%

b.7.90%

c.31.57%

d.13.90%

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The expected average rate of return for a proposed investment of $565,900 in a fixed asset...
The expected average rate of return for a proposed investment of $565,900 in a fixed asset with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total income of $309,080 for the 4 years is (round to two decimal places) a.1.09% b.0.55% c.13.65% d.27.31%
The expected average rate of return for a proposed investment of $6,850,000 in a fixed asset,...
The expected average rate of return for a proposed investment of $6,850,000 in a fixed asset, using straight-line depreciation, a useful life of 20 years, no residual value, and an expected total income of $13,700,000 over the 20 years, is (round to two decimal places) a.20.00% b.10.00% c.1.00% d.40.00%
1. The expected average rate of return for a proposed investment of $765,000 in a fixed...
1. The expected average rate of return for a proposed investment of $765,000 in a fixed asset, with a useful life of four years, straight-line depreciation, no residual value, and an expected total net income of $303,000 for the four years, is (round to two decimal points). 2.Hayden Company is considering the acquisition of a machine that costs $462,000. The machine is expected to have a useful life of six years, a negligible residual value, an annual net cash flow...
Average Rate of Return The average rate of return is another method that does not use...
Average Rate of Return The average rate of return is another method that does not use present value and is commonly used in making capital investment decisions. Unlike the cash payback method, the average rate of return focuses on income rather than cash flow. Assume that the investment involves an initial outlay of $100,000 with a five-year useful life and no salvage value under straight-line depreciation. The revenues are as follows: Year 1 - $50,000, Year 2 - $30,000, Year...
Vilas Company is considering a capital investment of $190,000 in additional productive facilities. The new machinery...
Vilas Company is considering a capital investment of $190,000 in additional productive facilities. The new machinery is expected to have a useful life of 5 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $12,000 and $50,000, respectively. Vilas has a 12% cost of capital rate, which is the required rate of return on the investment. Compute the cash payback...
Average Rate of Return The following data are accumulated by Watershed Inc. in evaluating two competing...
Average Rate of Return The following data are accumulated by Watershed Inc. in evaluating two competing capital investment proposals: Project A Project Z Amount of investment $52,000 $52,000 Useful life 4 years 5 years Estimated residual value 0 0 Estimated total income over the useful life $7,800 $13,000 Determine the expected average rate of return for each project. Round your answers to one decimal place. Project A % Project Z %
Average Rate of Return The following data are accumulated by Lone Peak Inc. in evaluating two...
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 $56,000 $76,000 Useful life 4 years 9 years Estimated residual value 0 0 Estimated total income over the useful life $8,960 $37,620 Determine the expected average rate of return for each proposal. If required, round your answers to one decimal place. 3D Printer % Truck %
Average Rate of Return Lakeland Company is considering the purchase of equipment for $140,000. The equipment...
Average Rate of Return Lakeland Company is considering the purchase of equipment for $140,000. The equipment will expand the Company's production and increase revenue by $35,000 per year. Annual cash operating expenses will increase by $10,000. The equipment's useful life is 10 years with no salvage value. Lakeland uses straight-line depreciation. The income tax rate is 35%. What is the average rate of return on the investment? Do not use negative signs with your answers. Increase in revenue Answer Increase...
Average Rate of Return The following data are accumulated by McDermott Motors Inc. evaluating two competing...
Average Rate of Return The following data are accumulated by McDermott Motors Inc. evaluating two competing capital investment proposals: Testing Equipment Diagnostic Software Amount of investment $60,000 $64,000 Useful life 4 years 9 years Estimated residual value $0 $0 Estimated total income over the useful life $9,600 $33,120 Determine the expected average rate of return for each proposal. If required, round to one decimal place. Testing Equipment % Diagnostic Software %
The average rate of return is another method that does not use present value and is...
The average rate of return is another method that does not use present value and is commonly used in making capital investment decisions. Unlike the cash payback method, the average rate of return focuses on income rather than cash flow. Assume that the investment involves an initial outlay of $100,000 with a five-year useful life and no salvage value under straight-line depreciation. The revenues are as follows: Year 1 - $10,000, Year 2 - $20,000, Year 3 - $30,000, Year...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT