Calculate the profitability of the following proposal using Average rate of return (ARR) method Proposal I Automatic machine Cost OMR 320000 Estimated life 6.5 years Estimated sales P.A160000 Cost : Material OMR 60000 Labour OMR 22000 Variable overheads OMR 14000 O a. All the options are wrong O b. 16.53% O c. 3.42% d. 4.62%

Calculate the profitability of the following proposal using Average rate of return (ARR) method Proposal I Automatic machine Cost OMR 320000 Estimated life 6.5 years Estimated sales P.A160000 Cost : Material OMR 60000 Labour OMR 22000 Variable overheads OMR 14000 O a. All the options are wrong O b. 16.53% O c. 3.42% d. 4.62%

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Calculate the profitability of the following proposal using Average rate of return (ARR) method
Proposal I Automatic machine Cost OMR 320000
Estimated life 6.5 years Estimated sales P.A160000
Cost : Material OMR 60000
Labour OMR 22000 Variable overheads OMR 14000
O a. All the options are wrong
Оь. 16.53%
О С.3.42%
O d. 4.62%

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