5) Company is considering about buying an equipment. This equipment needs 100.000 $ initial investment, produces 30.000 $ revenue for 5 years and 10.000 $ salvage value at the end of year 5. a) Find the rate of return (ROR) on this investment. b) What will be the decision If MARR is 15% ?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...
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5) Company is considering about buying an equipment. This equipment needs 100.000 $
initial investment, produces 30.000 $ revenue for 5 years and 10.000 $ salvage value
at the end of year 5.
a) Find the rate of return (ROR) on this investment.
b) What will be the decision If MARR is 15% ?
Transcribed Image Text:5) Company is considering about buying an equipment. This equipment needs 100.000 $ initial investment, produces 30.000 $ revenue for 5 years and 10.000 $ salvage value at the end of year 5. a) Find the rate of return (ROR) on this investment. b) What will be the decision If MARR is 15% ?
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