Solution a:
Payback period = Initial investment / net cash flow from operations = $84000/12000 = 7 years
Solution b:
Annual Depreciation = ($84000 - $22000) / 10 = $6200
Annual net income = cash flow - annual depreciation = 12000 - 6200 = $5800
Accounting rate of return = annual net income / initial investment = $5800/84000 = 6.905%
Solutiin c:
Average investment = (84000+22000)/ 2 = $53,000
Accounting rate of return = annual net income / average investment = $5800/53000 = 10.943%
Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows with Disinvestment Minn is...
Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows with Disinvestment Minn is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $100,000 Net cash inflows from operations (per year for 10 years) 25,000 Disinvestment-depreciable assets 19,000 For parts b. and c., round answers to three decimal places, if applicable. a. Determine the payback period. Answer: 4 years b. Determine the accounting rate of return on initial investment. c. Determine the accounting rate of...
Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows with Disinvestment Minn is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $75,000 Net cash inflows from operations (per year for 10 years) 15,000 Disinvestment-depreciable assets 8,000 For parts b. and c., round answers to three decimal places, if applicable. a. Determine the payback period. Answer years b. Determine the accounting rate of return on initial investment. Answer c. Determine the accounting rate of...
Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows with Disinvestment Minn is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $75,000 Net cash inflows from operations (per year for 10 years) 15,000 Disinvestment-depreciable assets 8,000 For parts b. and c., round answers to three decimal places, if applicable. a. Determine the payback period. _____ years b. Determine the accounting rate of return on initial investment. c. Determine the accounting rate of...
Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows without Disinvestment Juliana is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $35,000 Net cash inflows from operations (per year for 10 years) 5,000 Disinvestment 0 For parts b. and c., round answers to three decimal places, if applicable. a. Determine the payback period. ____ years b. Determine the accounting rate of return on initial investment. c. Determine the accounting rate of return on...
Payback period and Accounting Rate of Return: Equal Annual Operating Cash Flows without Disinvestment Juliana is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $49,000 Net cash inflows from operations (per year for 10 years) 7,000 Disinvestment For parts b. and C., round answers to three decimal places, if applicable. a. Determine the payback period. 7 years b. Determine the accounting rate of return on initial investment. c. Determine the accounting rate of return on average...
Payback period and Accounting Rate of Return: Equal Annual Operating Cash Flows with Disinvestment Roopali is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $125,000 Initial investment-working capital 19,000 Net cash inflows from operations (per year for 12 years) 18,000 Disinvestment-depreciable assets 14,000 Disinvestment-working capital 2,000 For parts b. and C., round answers to three decimal places, if applicable. a. Determine the payback period. 8 years b. Determine the accounting rate of return on initial investment...
Please show all work to get to answer. Minn is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $84,000 Net cash inflows from operations (per year for 10 years) 12,000 Disinvestment-depreciable assets 22,000 For parts b. and c., round answers to three decimal places, if applicable. a. Determine the payback period. 7 years b. Determine the accounting rate of return on initial investment. c. Determine the accounting rate of return on average investment.
Roopali is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $60,000 Initial investment-working capital 6,000 Net cash inflows from operations (per year for 10 years) 11,000 Disinvestment-depreciable assets 5,000 Disinvestment-working capital 2,000 For parts b. and c., round answers to three decimal places, if applicable. a. Determine the payback period. b. Determine the accounting rate of return on initial investment c. Determine the accounting rate of return on average investment
Juliana is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $36,000 Net cash inflows from operations (per year for 10 years) 6,000 Disinvestment 0 For parts b. and c., round answers to three decimal places, if applicable. a. Determine the payback period. b. Determine the accounting rate of return on initial investment. c. Determine the accounting rate of return on average investment.
Please show all work. Juliana is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $36,000 Net cash inflows from operations (per year for 10 years) 6,000 Disinvestment 0 For parts b. and c., round answers to three decimal places, if applicable. a. Determine the payback period. 6 years b. Determine the accounting rate of return on initial investment. c. Determine the accounting rate of return on average investment.