A potential project involves an initial investment in machinery of RO.1,000,000 and has the following cash inflows: Year 1 – RO.250,000 Year 2 – RO.350,000 Year 3 – RO.200,000 Year 4 – RO.400,000 At the end of year 4, the machinery will be sold for RO.600,000. Calculate the accounting rate of return based on average investment. NOTE (DEDUCT THE DEPRECIATION TO ARRIVE AT THE CORRECT AVERAGE PROFIT) a. None of the options b. 35% c. 20% d. 25% Clear my choice
A potential project involves an initial investment in machinery of RO.1,000,000 and has the following cash inflows: Year 1 – RO.250,000 Year 2 – RO.350,000 Year 3 – RO.200,000 Year 4 – RO.400,000 At the end of year 4, the machinery will be sold for RO.600,000. Calculate the accounting rate of return based on average investment. NOTE (DEDUCT THE DEPRECIATION TO ARRIVE AT THE CORRECT AVERAGE PROFIT) a. None of the options b. 35% c. 20% d. 25% Clear my choice
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A potential project involves an initial investment in machinery of RO.1,000,000 and has the following cash inflows:
Year 1 – RO.250,000
Year 2 – RO.350,000
Year 3 – RO.200,000
Year 4 – RO.400,000
At the end of year 4, the machinery will be sold for RO.600,000.
Calculate the accountingrate of return based on average investment.
NOTE (DEDUCT THEDEPRECIATION TO ARRIVE AT THE CORRECT AVERAGE PROFIT)
Year 1 – RO.250,000
Year 2 – RO.350,000
Year 3 – RO.200,000
Year 4 – RO.400,000
At the end of year 4, the machinery will be sold for RO.600,000.
Calculate the accounting
NOTE (DEDUCT THE
a.
None of the options
b.
35%
c.
20%
d.
25%
Clear my choice
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education