Project 1 involves an outlay of $2.5m and gets an annual net income of $1m for 5 years. Project 2 involves an outlay of $10m but gets no income until year 5, year project 1 project 2 10 -2.5 -10 10 2 10 4 10 1. 15 Use the payback method to decide which is the most attractive project. What is the accounting rate of return for project 17 Write your answer as a percent using the percent symbol. What is the accounting rate of return for project 2? Write your answer as a percent using the percent symbol. Decide which is the most attractive project using the accounting rate of return method.
Project 1 involves an outlay of $2.5m and gets an annual net income of $1m for 5 years. Project 2 involves an outlay of $10m but gets no income until year 5, year project 1 project 2 10 -2.5 -10 10 2 10 4 10 1. 15 Use the payback method to decide which is the most attractive project. What is the accounting rate of return for project 17 Write your answer as a percent using the percent symbol. What is the accounting rate of return for project 2? Write your answer as a percent using the percent symbol. Decide which is the most attractive project using the accounting rate of return method.
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
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Transcribed Image Text:Project 1 involves an outlay of $2.5m and gets an annual net income of $1m for 5 years. Project 2 involves an outlay of $10m but gets no income until year 5.
year
project 1 project 2
-2.5
-10
1
10
1
3
4
10
1.
15
Use the payback method to decide which is the most attractive project.
What is the accounting rate of return for project 17 Write your answer as a percent using the percent symbol.
What is the accounting rate of return for project 2? Write your answer as a percent using the percent symbol.
Decide which is the most attractive project using the accounting rate of return method.
1.
1.
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