Finnegan Company plans to Invest In a new operating plant that Is expected to cost $500,000. The projected Incremental Income from the Investment Is as follows:Net IncomeYearAfter Tax1$30,000$45,000$50,000$55,000$40,000$20,000The unadjusted rate of return on the Inltial Investment would be approximately.Multiple Choice80%6.0%.16.7%48.0%

Calculation of average income: Year Net income 1 30000 2 45000 3 50000 4 55000…

Answered: The unadjusted rate of return on the…

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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Define Present value and future value. If present value and future value are equal what is the rate? Is future value always greater than present value?
Explain normal rate of return.
Will the actual realized yields be equal to the expected yields if interest rates change? If not, how will they differ?
n is the number of periods of an investment, PV is the starting value, FVn is the future value n periods ahead, and ^ means 'to the power of'. What is the correct formula for calculating return? a)(PV/FVn)^n - 1 b)(FVn/PV)^n c)1 - (FVn/PV)^n d)(FVn/PV)^n - 1
The correct formula to calculate the future value (FV) of a present value (PV) when simple interest is used is? Note: N would be number of periods and i would be the interest rate. A. FV = PV X (1+i)^N, where^ represents power B. FV = PV X (1+i)^-N, where^ represents power O C. FV = PV/((1+i) X N) D. FV = PV x (1 + (N x i)) Reset Selection Mark for Review What's This? The correct formula to calculate the future value (FV) of a present value (PV) when simple interest is used is? Note: N would be number of periods and i would be the interest rate. A. FV = PV X (1+i)^N, where^ represents power OB. FV = PV X (1+i)^-N, where^ represents power C. FV = PV /((1+i) x N) D. FV = PV x (1 + (N X i)) Reset Selection Mark for Review What's This?
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There are some cases in which the present worth (( PW )) of an investment is positive while its annual worth ((AW )) is negative. Select one: O True O False
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The unadjusted rate of return on the Initial tnvestment would be approximately.