MC algo 9-6 Calculating AAR Mountain Frost is considering a new project with an initial cost of $185,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $19,600, $20,500, $24,600, and $16,500, respectively. What is the average accounting return? Multiple Choice 20.12% 21.95% 16.46% 10.97% 23.51%

MC algo 9-6 Calculating AAR Mountain Frost is considering a new project with an initial cost of $185,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $19,600, $20,500, $24,600, and $16,500, respectively. What is the average accounting return? Multiple Choice 20.12% 21.95% 16.46% 10.97% 23.51%

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter9: Capital Budgeting Techniques

Section: Chapter Questions

Problem 12PROB

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MC algo 9-6 Calculating AAR

Mountain Frost is considering a new project with an initial cost of $185,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $19,600, $20,500, $24,600, and $16,500, respectively. What is the average accounting return?

Multiple Choice

20.12%
21.95%
16.46%
10.97%
23.51%

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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MC algo 9-6 Calculating AAR Mountain Frost is considering a new project with an initial cost of $185,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $19,600, $20,500, $24,600, and $16,500, respectively. What is the average accounting return? Multiple Choice 20.12% 21.95% 16.46% 10.97% 23.51%
A Mountain Frost is considering a new project with an initial cost of $270,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $21,300, $22,200, $24,600, and $18.200, respectively, What is the average accounting return? Multiple Choice O O O C 14.65% 15.00% 11.99% 1712%
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ic Yo NS io cer ist bun ngs nnée Current Attempt in Progress Blossom Manufacturing Co. is evaluating two projects. The company uses payback criteria of three years or less. Project A has a cost of $905,000, and project B's cost is $1,247,300. Cash flows from both projects are given in the following table. Year 1 2 3 4 Project A $86,212 313,562 427,594 285,552 Project B $586,212 413,277 231,199 What are their discounted payback periods? (Round answers to 2 decimal places, e.g. 15.25. If discounted payback period exceeds life of the project, enter 0.00 for the answer.) Discounted payback period of project A Discounted payback period of project B will he accepted with a discount rate of 8 percent? átv zoom
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Required information Problem 24-2A (Algo) Payback period, accounting rate of return, net present value, and net cash flow calculation LO P1, P2, P3 [The following information applies to the questions displayed below.] Project Y requires a $331,500 investment for new machinery with a four-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within eath year. (PV of $1. FV of $1. PVA of $1. and EVA of $1) (Use appropriate factor(s) from the tables provided.) Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Problem 24-2A (Algo) Part 2 2. Determine Project Y's payback period. Project Y Numerator: initial investment $ Payback Period 1 331,500/ Denominator: Annual net cash flow Project Y $ 350,000 156,800 82,875 25,000 $ 85,325 Payback Period