Foc Juniper Corporation is considering two alternative investment proposals with the following data:Proposal YProposal X$870,000$480,0008 years$65,000$-Straight-lineInvestmentUseful lifeEstimated annual net cash inflows for 8 yearsResidual valueDepreciation methodRequired rate of returnWhat is the accounting rate of return for Proposal X? (Round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, X.XX%.)OA. 4.17%B. 5.32%C. 1.04%D. 16.67%8 years$145,000$80,000Straight-line20%10%

Annual net income = Annual cash inflows - DepreciationAnnual depreciation = (Cost - residual value)/…

Juniper Corporation is considering two alternative investment proposals with the following data: Proposal Y Proposal X $870,000 $480,000 8 years $65,000 $- Straight-line 10% Investment Useful life Estimated annual net cash inflows for 8 years Residual value Depreciation method Straight line Required rate of return 20% What is the accounting rate of return for Proposal X? (Round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, X.XX%.) 8 years $145,000 $80,000

Juniper Corporation is considering two alternative investment proposals with the following data: Proposal Y Proposal X $870,000 $480,000 8 years $65,000 $- Straight-line 10% Investment Useful life Estimated annual net cash inflows for 8 years Residual value Depreciation method Straight line Required rate of return 20% What is the accounting rate of return for Proposal X? (Round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, X.XX%.) 8 years $145,000 $80,000

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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Question

Foc

Juniper Corporation is considering two alternative investment proposals with the following data:
Proposal Y
Proposal X
$870,000
$480,000
8 years
$65,000
$-
Straight-line
Investment
Useful life
Estimated annual net cash inflows for 8 years
Residual value
Depreciation method
Required rate of return
What is the accounting rate of return for Proposal X? (Round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, X.XX%.)
OA. 4.17%
B. 5.32%
C. 1.04%
D. 16.67%
8 years
$145,000
$80,000
Straight-line
20%
10%

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