A mini-mart needs a new freezer and the initial investment will cost $310,000. Incremental revenues, including cost savings, are $198,000, and incremental expenses, including depreciation, are $125,000. There is no salvage value. What is the accounting rate of return (ARR)? How much must be invested now to receive $30,000 for 10 years if the first $30,000 is received one year from now and the rate is 8%?

A mini-mart needs a new freezer and the initial investment will cost $310,000. Incremental revenues, including cost savings, are $198,000, and incremental expenses, including depreciation, are $125,000. There is no salvage value. What is the accounting rate of return (ARR)? How much must be invested now to receive $30,000 for 10 years if the first $30,000 is received one year from now and the rate is 8%?

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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