What is the return on investment (ROI) assuming User-Friendly uses (a) the straight-line method for depreciation and (b) beginning-of-year net book values to compute ROI?
What is the return on investment (ROI) assuming User-Friendly uses (a) the straight-line method for depreciation and (b) beginning-of-year net book values to compute ROI?
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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Question
The following information was presented by User-Friendly Industries Company for an asset purchased at the beginning of the previous year.
Original cost of the asset | $ | 20,000 | ||
Useful life of the asset | 10 | years | ||
Annual operating profit, including |
$ | 4,000 | ||
Salvage value | $ | -0- | ||
What is the
Multiple Choice
-
20.0%.
-
11.1%.
-
25.0%.
-
22.2%.
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