Q3) 3. The company will invest $150,000 in a project and average annual income $50,000. The investment will provide the following inflows: Year Cash inflow 1 $ 25,000 2 45,000 3 30,000 4 50,000 5 70,000 Calculate: Accounting rate of return Internal Rate of Return at 10% and 15% discount factor.

Q3) 3. The company will invest $150,000 in a project and average annual income $50,000. The investment will provide the following inflows: Year Cash inflow 1 $ 25,000 2 45,000 3 30,000 4 50,000 5 70,000 Calculate: Accounting rate of return Internal Rate of Return at 10% and 15% discount factor.

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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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Q3) 3. The company will invest $150,000 in a project and average annual income $50,000. The investment will provide the following inflows:

Year	Cash inflow
1	$ 25,000
2	45,000
3	30,000
4	50,000
5	70,000

Calculate:

Accounting rate of return
Internal Rate of Return at 10% and 15% discount factor.

Definition Definition Transfer of funds into a company by any third party, which may happen due to any operational, investing, and financing activities. The cash inflow includes payments made by customers or investments made by the investors into the company by purchasing its equity.

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