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Win Corporation is considering the purchase of wood cutting equipment. Data on the equipment are as follows: Original investment Net annual cash inflow Expected economic life in years Salvage value at the end of five years The company uses the straight-line method of depreciation. What is the accounting rate of return on original investment rounded off to the nearest percent, assuming no taxes are paid? P30,000 P12,600 P3,000 42.0% O 20.0% O 24.0% O 22.0%

Win Corporation is considering the purchase of wood cutting equipment. Data on the equipment are as follows: Original investment Net annual cash inflow Expected economic life in years Salvage value at the end of five years The company uses the straight-line method of depreciation. What is the accounting rate of return on original investment rounded off to the nearest percent, assuming no taxes are paid? P30,000 P12,600 P3,000 42.0% O 20.0% O 24.0% O 22.0%

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
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Win Corporation is considering the purchase of wood cutting equipment. Data on the equipment are as follows: Original investment Net annual cash inflow Expected economic life in years Salvage value at the end of five years P30,000 P12,600 5 P3,000 The company uses the straight-line method of depreciation. What is the accounting rate of return on original investment rounded off to the nearest percent, assuming no taxes are paid? O 42.0% O 20.0% O 24.0% O 22.0%
Transcribed Image Text:Win Corporation is considering the purchase of wood cutting equipment. Data on the equipment are as follows: Original investment Net annual cash inflow Expected economic life in years Salvage value at the end of five years P30,000 P12,600 5 P3,000 The company uses the straight-line method of depreciation. What is the accounting rate of return on original investment rounded off to the nearest percent, assuming no taxes are paid? O 42.0% O 20.0% O 24.0% O 22.0%
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