A project requires a $2,930,000 initial investment for new machinery with a five-year life and a salvage value of $326,000. The project is expected to yield annual income of $260,480 per year and net cash flows of $713,000 per year for the next five years. The project's accounting rate of return is: Multiple Choice O 24.9% 20.0% 48.1% 4.0%
A project requires a $2,930,000 initial investment for new machinery with a five-year life and a salvage value of $326,000. The project is expected to yield annual income of $260,480 per year and net cash flows of $713,000 per year for the next five years. The project's accounting rate of return is: Multiple Choice O 24.9% 20.0% 48.1% 4.0%
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 21P
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![A project requires a $2,930,000 initial investment for new machinery with a five-year life and a salvage value of $326,000. The
project is expected to yield annual income of $260,480 per year and net cash flows of $713,000 per year for the next five years.
The project's accounting rate of return is:
Multiple Choice
O
24.9%
20.0%
48.1%
4.0%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc2efd6d7-9ab9-469e-b87e-44cea447ee47%2F208e49a5-41a2-4a86-9c1e-e20e1f20fb10%2Ffb4ewu_processed.png&w=3840&q=75)
Transcribed Image Text:A project requires a $2,930,000 initial investment for new machinery with a five-year life and a salvage value of $326,000. The
project is expected to yield annual income of $260,480 per year and net cash flows of $713,000 per year for the next five years.
The project's accounting rate of return is:
Multiple Choice
O
24.9%
20.0%
48.1%
4.0%
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