Skyline Tech Ltd. is considering a proposed investment of $8,250,000 in a fixed asset with the following details: Depreciation Method: Straight-line • • Useful Life: 25 years • • Residual Value: $0 Total Expected Net Income Over 25 $20,625,000 What is the expected average rate of return (ARR)? Years:
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- Calculate the expected accounting rate of return (referred to as "unadjusted rate of return " in your textbook ) for a proposed investment of $9,000,000 in a fixed asset , using straight line depreciation with a useful life of 20 years , $ 600,000 residual value , and is expected to increase the company's total net income (after depreciation and taxes ) over the investment's 20-year useful life by $12,000,000 . 250.0 % 18.0% 12.5% 14.3 % 6.7%The expected average rate of return for a proposed investment of $5,090,000 in a fixed asset, using straight-line depreciation, a useful life of 20 years, no residual value, and an expected total income of $10,180,000 over the 20 years, is (round to two decimal places) a.20.00% b.1.00% c.10.00% d.40.00%The expected average rate of return for a proposed investment of $6,720,000 in a fixed asset, using straight-line depreciation, a useful life of 20 years, no residual value, and an expected total income of $20,160,000 over the 20 years, is (round to two decimal places) a. 1.50% b. 30.00% c. 60.00% d. 15.00%
- Chee company has gathered the following data on a proposed investment project? Investment required in equipment : 240,000$ Annual cash inflows : 50,000$Salvage value: 0$ Life of the investment: 8 years Requried rate of return : 10% Assets will be depreciated using straight line deperciation method. Required: Using the net Present value and the interval rate of return methods, Is this a good investment?Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of 15% per year and a study period of 10 years. Alternative C First Cost AOC, per Year Annual Increase in Operating Cost, per Year Salvage Value Life, Years $-50,000 $-9,000 $-28,000 $-5,000 $-700 $-900 $6,000 $700 10 The present worth of alternative C is $ and that of alternative D is $ Alternative D offers the lower present worth.The expected average rate of return for a proposed investment of $649,000 in a fixed asset with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total income of $256,600 for the 4 years is (round to two decimal places) a.0.40% b.19.77% c.0.79% d.9.88%
- Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of 10% per year and a study period of 10 years. Alternative C First Cost $-40,000 $-11,000 $-24,000 AOC, per Year Annual Increase in Operating Cost, per Year Salvage Value Life, Years $-2,000 $-200 $-500 $6,000 $200 10 The present worth of alternative C is $ and that of alternative D is $ (Click to select) voffers the lower present worth.The expected average rate of return for a proposed investment of $6,000,000 in a fixed asset, using straight-line depreciation, with a useful life of 20 years, no residual value, and an expected total net income of $12,000,000 over the 20 years is a. 20% b. 10% c. 40% d. 5%The expected average rate of return for a proposed investment of $44,000 in a fixed asset using straight-line depreciation, with a useful life of 4 years, no residual value, and an expected total net income of $11,000, is
- Osler Company is considering an investment with the following data: Initial cost $200,000 Annual net cash inflows $25,000 Expected life 10 years Salvage value none Depreciation will be taken on a straight-line basis over the expected life of the investment The company requires a minimum rate of return of 4%. What is the net present value of the investment? Period 1 2 3 4 5 6 7 8 9 10 4% 0.962 1.886 2.775 3.630 4.452 5.242 6.002 6.773 7.435 8.111 a.$118,170 b.$2,775 c.($81,830) d.$202,775Need answer the accounting questionOsler Company is considering an investment with the following data: Initial cost $200,000 Annual net cash inflows $25,000 Expected life 10 years Salvage value none Depreciation will be taken on a straight-line basis over the expected life of the investment.What is the accounting rate of return for the investment? a.12.5% b.2.5% c.20% d.25% e.10%