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Simple rate of return | = | 15% | |
Workings: | |||
Computation of Simple rate of return: | |||
Simple rate of return | = | Net Profit / Investment | |
= | $30000 / $200000 | ||
= | 15% | ||
Net Profit | = | Annual Cash Inflows -Annual Depreciation on new machine | |
= | $50000- [($200000 - 0)/10 years] | ||
= | $50000- $20000 | ||
= | $ 30,000 |
Oriental Corporation has gathered the following data on a proposed investment project: Investment in depreciable equipment...
Oriental Corporation has gathered the following data on a proposed investment project: Investment in depreciable equipment $ 610,000 Annual net cash flows $ 88,000 Life of the equipment 16 years Salvage value $ 0 Discount rate 10 % The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the investment would be:
2.
Oriental Corporation has gathered the following data on a proposed investment project: Investment in depreciable equipment Annual net cash flows Life of the equipment Salvage value Discount rate $ 450,000 $ 90,000 10 years $ 0 78 The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the investment would be: Joetz Corporation has gathered the following data on a proposed investment project (Ignore...
joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required in equipment $ 30,000 Annual cash inflows $ 6,000 Salvage value of equipment $ 0 Life of the investment 15 years Required rate of return 10 % The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the investment is: Multiple Choice 5 years 15 years 2 years...
Joetz Corporation has gathered the following data on a proposed investment project (lgnore income taxes.) $37,000 $8,800 Investment required in equipment Annual cash inflows Salvage value of equipment 0 15 years Life of the investment Required rate of return 10% The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided...
Joetz Corporation has gathered the following data on a proposed investment project (lgnore income taxes.) $38,500 9,400 Investment required in equipment Annual cash inflows Salvage value of equipment Life of the investment 15 years Required rate of return 10% The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided. The...
Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required in equipment $ 40,000 Annual cash inflows $ 10,000 Salvage value of equipment $ 0 Life of the investment 15 years Required rate of return 10 % The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The simple rate of return for the investment (rounded to the nearest tenth of a...
Joetz Corporation has gathered the following data on a proposed investment project (Ignore Income taxe $37.000 $ 8,000 Investment required in equipment Annual cash inflows Salvage value of equipment Life of the investment Required rate of return 15 years 105 The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial Inve Click here to view Exhibit78-1 and Exhibit 78-2. to determine the appropriate discount factors) using the tables provided The...
Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required in equipment $ 39,500 Annual cash inflows $ 9,800 Salvage value of equipment $ 0 Life of the investment 15 years Required rate of return 10 % The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s)...
Overland Corporation has gathered the following data on a
proposed investment project:
The company uses straight-line depreciation on all equipment.
Assume cash flows occur uniformly throughout a year except for the
initial investment.
The accrual accounting rate of return on the investment is:
A. 10.00%
B. 16.67%
C. 36.67%
D. 26.67%
$150,000 $40,000 Investment required in equipment Annual cash inflows Salvage value of equipment... Life of the investment........ Required rate of return ............. $0 10 years 10%
Purvell Corporation has just acquired a new machine with the following characteristics (Ignore income taxes.): Cost of the equipment Annual cash savings Life of the machine $50,000 $15,000 8 years The company uses straight-line depreciation and a $5,000 salvage value. Assume cash flows occur uniformly throughout a year except for the initial investment and the salvage at the end of the project The simple rate of return would be closest to: Multiple Choice O 30.0% . 17.5% 18.75% 0 12.5%...