Please show all work to get to answer.
Annual depreciation expense = ( Cost of assets - Residual value)/Useful life
= (84,000-22,000)/10
= $6,200
Annual net income = Net cash inflow from operations - Annual depreciation expense
= 12,000-6,200
= $5,800
b.
Accounting rate of return = Annual net income/Initial investment
= 5,800/84,000
= 6.905%
c.
Average investment = ( Initial investment + Residual value)/2
= ( 84,000+22,000)/2
= $53,000
Accounting rate of return on average investment = Annual net income/Average investment
= 5,800/53,000
= 10.943%
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Please show all work to get to answer. Minn is considering an investment proposal with the...
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