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A mini-mart needs a new freezer and the initial investment will cost $300,000. Incremental revenues, including cost savings, are $220,000, and incremental expenses, including depreciation, are $130,000. There is no salvage value. What is the accounting rate of return (ARR)?

A mini-mart needs a new freezer and the initial investment will cost $300,000. Incremental revenues, including cost savings, are $220,000, and incremental expenses, including depreciation, are $130,000. There is no salvage value. What is the accounting rate of return (ARR)?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A mini-mart needs a new freezer and the initial investment will cost $300,000. Incremental revenues, including cost savings, are $220,000, and incremental expenses, including depreciation, are $130,000. There is no salvage value. What is the accounting rate of return (ARR)? %
Transcribed Image Text:A mini-mart needs a new freezer and the initial investment will cost $300,000. Incremental revenues, including cost savings, are $220,000, and incremental expenses, including depreciation, are $130,000. There is no salvage value. What is the accounting rate of return (ARR)? %
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