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The Corporation is considering two alternative investment proposals with the following data: ​ Proposal X Proposal Y Investment $860,000 $510,000 Useful life 8 years 8 years Estimated annual net cash inflows for 8 years $130,000 $68,000 Residual value $42,000 $- Depreciation method Straight-line Straight-line Required rate of return 13% 13% What is the accounting rate of return for Proposal X? (Round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, X.XX%.)     2.62%     15.12%     3.23%     1.57%

The Corporation is considering two alternative investment proposals with the following data: ​ Proposal X Proposal Y Investment $860,000 $510,000 Useful life 8 years 8 years Estimated annual net cash inflows for 8 years $130,000 $68,000 Residual value $42,000 $- Depreciation method Straight-line Straight-line Required rate of return 13% 13% What is the accounting rate of return for Proposal X? (Round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, X.XX%.)     2.62%     15.12%     3.23%     1.57%

FINANCIAL ACCOUNTING
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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  1. The Corporation is considering two alternative investment proposals with the following data:

    ​ Proposal X Proposal Y
    Investment $860,000 $510,000
    Useful life 8 years 8 years
    Estimated annual net
    cash inflows for 8 years    		 $130,000 $68,000
    Residual value $42,000 $-
    Depreciation method Straight-line Straight-line
    Required rate of return 13% 13%


    What is the accounting rate of return for Proposal X? (Round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, X.XX%.)

       

    2.62%
       

    15.12%
       

    3.23%
       

    1.57%
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