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Robertson Hardware is adding a new product line that will require an investment of $1,454,000. Managers estimate that this investment will have a 10-year ife and generate net cash inflows of $310,000 the first year, $290,000 the second year, and $250,000 each year thereafter for eight years. Assume the project has no residual value. Compute the ARR for the investment. Round to two places.

Robertson Hardware is adding a new product line that will require an investment of $1,454,000. Managers estimate that this investment will have a 10-year ife and generate net cash inflows of $310,000 the first year, $290,000 the second year, and $250,000 each year thereafter for eight years. Assume the project has no residual value. Compute the ARR for the investment. Round to two places.

Essentials Of Investments
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
Problem 1PS
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= Homework: . HW Score: 10.71%, 3.43 of 32 points Question 2, E26-21 (simi. Save O Points: 0 of 4 Robertson Hardware is adding a new product line that will require an investment of $1,454,000. Managers estimate that this investment will have a 10-year fe and generate net cash inflows of $310,000 the first year, $290,000 the second year, and $250,000 each year thereafter for eight years. Assume the project has no residual value. Compute the ARR for the investment. Round to two places. Select the formula, then enter the amounts to calculate the ARR (accounting rate of return) for the new product line. (Round ARR to the nearest hundredth percent (two decimal places). X.XX%.) Average annual operating income + JAverage amount invested ARR 310000 1.07 % 290000 E26-21 (simi. HW Score: 10.71%, 3.43 of 32 points O Points: 0 of 4 Save Amount invested vill require an investment of $1,454,000. Managers estimate that this investment will have a 10-year rear, $290,000 the second year, and $250,000 each year thereafter for eight years. Assume the investment. Round to two places. Average amount invested Average annual operating income the ARR (accounting rate of return) for the new product line. (Round ARR to the nearest hundredth Present value of net cash inflows Average annual operating income Average amount invested ARR 310000 290000 1.07 % = Homework: .. « Question 71%, 3.43 of 32 points 14 Save Amount invested Robertson Hardware is adding a new product line fe and generate net cash inflows of $310,000 the Average amount invested project has no residual value. Compute the ARR fc pers estimate that this investment will have a 10-year each year thereafter for eight years. Assume the Average annual operating income Select the formula, then enter the amounts to calci Present value of net cash inflows percent (two decimal places). X.XX%.) product line. (Round ARR to the nearest hundredth Average annual operating income • |Average amount invested ARR Toxt Brodictionc: On
Transcribed Image Text:= Homework: . HW Score: 10.71%, 3.43 of 32 points Question 2, E26-21 (simi. Save O Points: 0 of 4 Robertson Hardware is adding a new product line that will require an investment of $1,454,000. Managers estimate that this investment will have a 10-year fe and generate net cash inflows of $310,000 the first year, $290,000 the second year, and $250,000 each year thereafter for eight years. Assume the project has no residual value. Compute the ARR for the investment. Round to two places. Select the formula, then enter the amounts to calculate the ARR (accounting rate of return) for the new product line. (Round ARR to the nearest hundredth percent (two decimal places). X.XX%.) Average annual operating income + JAverage amount invested ARR 310000 1.07 % 290000 E26-21 (simi. HW Score: 10.71%, 3.43 of 32 points O Points: 0 of 4 Save Amount invested vill require an investment of $1,454,000. Managers estimate that this investment will have a 10-year rear, $290,000 the second year, and $250,000 each year thereafter for eight years. Assume the investment. Round to two places. Average amount invested Average annual operating income the ARR (accounting rate of return) for the new product line. (Round ARR to the nearest hundredth Present value of net cash inflows Average annual operating income Average amount invested ARR 310000 290000 1.07 % = Homework: .. « Question 71%, 3.43 of 32 points 14 Save Amount invested Robertson Hardware is adding a new product line fe and generate net cash inflows of $310,000 the Average amount invested project has no residual value. Compute the ARR fc pers estimate that this investment will have a 10-year each year thereafter for eight years. Assume the Average annual operating income Select the formula, then enter the amounts to calci Present value of net cash inflows percent (two decimal places). X.XX%.) product line. (Round ARR to the nearest hundredth Average annual operating income • |Average amount invested ARR Toxt Brodictionc: On
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