For parts b. and c., round answers to three decimal places, if applicable. a. Determine the payback period. Answer years b. Determine the accounting rate of return on initial investment. Answer c. Determine the accounting rate of return on average investment. Answer
For parts b. and c., round answers to three decimal places, if applicable. a. Determine the payback period. Answer years b. Determine the accounting rate of return on initial investment. Answer c. Determine the accounting rate of return on average investment. Answer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Payback Period and Accounting
Juliana is considering an investment proposal with the following cash flows:
Initial investment- |
$45,000 |
Net |
5,000 |
Disinvestment | 0 |
For parts b. and c., round answers to three decimal places, if applicable.
a. Determine the payback period.
Answer years
b. Determine the accounting rate of return on initial investment.
Answer
c. Determine the accounting rate of return on average investment.
Answer
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