ACCOUNTING RATE OF RETURN XYZ Company is looking to invest in some new machinery to replace its current malfunctioning one. The new machine costs ₱420,000 and generates income of ₱1,380,000 annually for 12 years. What is the ARR of the new machinery? (Round your answer to two decimal places) *

ACCOUNTING RATE OF RETURN XYZ Company is looking to invest in some new machinery to replace its current malfunctioning one. The new machine costs ₱420,000 and generates income of ₱1,380,000 annually for 12 years. What is the ARR of the new machinery? (Round your answer to two decimal places) *

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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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

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ACCOUNTING RATE OF RETURN

XYZ Company is looking to invest in some new machinery to replace its current malfunctioning one. The new machine costs ₱420,000 and generates income of ₱1,380,000 annually for 12 years.

What is the ARR of the new machinery? (Round your answer to two decimal places) *

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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