Provide correct answer the accounting question Burry Inc. has provided the following data to be used in evaluatinga proposed investment project:Initial investmentAnnual cash receiptsLife of the project$750,000$563,0007 yearsAnnual cash expenses $310,000Salvage valueTax rate$75,00030%For tax purposes, the entire initial investment without any deductionfor salvage value will be depreciated over 5 years. The companyuses a discount rate of 11%.When computing the net present value of the project, what are theannual after-tax cash receipts?a) $168,900b) $67,500c) $338,000d) $394,100

Step 1: Define Fixed AssetsLong-term assets which are purchased and used in the manufacture of goods…

Answered: Burry Inc. has provided the following…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 8P

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Burry Inc. Has provided the following data to be used in evaluating a proposed investment project:
A potential project involves an initial investment in machinery of RO.1,000,000 and has the following cash inflows:Year 1 – RO.250,000Year 2 – RO.350,000Year 3 – RO.200,000Year 4 – RO.400,000At 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
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