You are looking at an investment which has an initial cost of $400,000 and a salvage value of zero after five years. What is the average accounting return for this investment given the following annual net incomes: year 1 $100,000, year 2 150,000, year 3 150,000, year 4 100,000 and year 5 50,000. a. 27.5% b. 52.5% c. 55.0% d. 137.5%

Q: Investment Perlod 1 A - $4,000 $11,000 B -20,000 33,000

A: Profitability index = Present value of cash inflow / Initial investment Investment with higher…

Q: J Average Accounting Return Let's suppose an investment project has the following projected cash…

A: The accounting rate of return (ARR) is a formula that shows the percentage rate of return…

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A: Step 1:To find the fair value of an investment that pays a growing annual payment, we can use the…

Q: Assuming a cost of capital of 5% and that $60,000 is the correct profit estimate each year for the…

A: Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or…

Q: According to the Rule of 72, what must the return on an investment be to double an initial…

A: Investors have different options to make investments, and the motive behind investments is to…

Q: 79. You have an investment that in today's dollars returns 15% of your investment in year 1, 12% in…

A: YearsDollar Return115%212%39%41-(15%+12%+9%) = 64%

Q: Part II - Average Rate of Return (Ch 26) The management of River Corporation is considering the…

A: concept. average rate of return can be calculated in two ways:- 1. on basis of initial investment.…

Q: A $12,000 investment will return annual benefit for six yearswith no salvage value at the end of six…

A: Investment = $12000Tax rate = 46%Inflation rate = 5%Tenure =6 yearsdepreciation = SLMAnnual benefits…

Q: A company has two investment possibilities, with the following cash inflows: If the firm can earn 7…

A: We need to use the concept of time value of money to solve the question. According to the concept of…

Q: 4. Machine A costs $800, requires annual maintenance of $150, and will last for 10 years. Machine B…

A: Present worth refers to the current date value of the future cash flows including the initial…

Q: An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $350…

A: Capital budgeting refers to the technique used for estimating the viability of the project by using…

Q: Evaluate the future value of an investment that has the following multiple cash flows: Year Cash…

A: Cash Flow for Year 2 = cf2 = $22,100Cash Flow for Year 3 = cf3 = $40,100Cash Flow for Year 5 = cf5 =…

Q: 1.Compute the geometric mean (return) and the final balance after 5 years on a $1,500 investment…

A: Geomean The returns an array's or a range of positive data's geometric mean. To determine the…

Q: Compute the net present value (NPV) of this investment.

A: Meaning of Net present value It is the difference between present value of cash inflows and present…

Q: The present worth of a multiyear investment with all positive cash flows (incomes) other than the…

A: minimum acceptable rate of return (MARR), is the minimum required rate of return or target rate that…

Q: What is the fair value of an investment that pays $100 per year in year 1, grows at the rate of 3%…

A:

Q: 22) Consider a position of 2,000,000 investment in asset X and 3,000,000 in Investment Y. Daily…

A: One day standard deviation of asset X (sX) = 2,000,000 * 0.1% = 2,000.One day standard deviation of…

Q: Compute the payback period for an investment with the following net cash flows. (Round your answer…

A: >Payback period is the amount of time it will take to get the money invested back. >It is…

Q: The present worth of a multiyear investment with all positive cash flows (incomes) other than the…

A: Minimum acceptable rate of return (MARR), is the minimum required rate of return or target rate that…

Q: Mountain Brook Company is considering two investment opportunities whose cash flows are provided…

A: Explanation of the Present Value Index:The Present Value Index (PVI) measures the relative…

Q: I want to answer this question

A: To find the fair value of the investment, we use the formula for the present value of a growing…

Q: What is the simple annual rate of return on a $10,000, 3-year investment with cash inflows of $2,000…

A: The simple annual rate of return is calculated by dividing the annual cash flow by the initial…

Q: What rate of return would you need if you wanted to accumulate $1,000,000 in 25 years and invest…

A: Rate of return: It implies to the rate that is often expected or charged by the investor from the…

Q: Give me correct answer

A: Given, First paym nt = $100Growth rate = 3%Required return = 8% Fair value of investment = Required…

Q: What is the internal rate of return (IRR) of an investment that requires an initial investment of…

A: Initial investment (PV) = $14,000Future value (FV) = $19,320Number of years = 1 years