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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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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