11. The expected average rate of return for a proposed investment of $800,000 in a fixed...
11. The expected average rate of return for a proposed investment of $800,000 in a fixed asset with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total net income of $360,000 for the 4 years, is a. 45% b. 22.5% c. 11.3% d. 5.5% the answer is b but why out
Homework Answers
Average investment = 800000 / 2 = 400000
Average income per year = 360000/4=90000
ROI = 90000 / 400000 = .225 OR 22.5%
Correct option is "B"
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11. The expected average rate of return for a proposed
investment of $800,000 in a fixed...
The expected average rate of return for a proposed investment of $699,000 in a fixed asset,...
The expected average rate of return for a proposed investment of $699,000 in a fixed asset, with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total net income of $216,000 for the 4 years, is (round to two decimal points). a.7.73% b.30.90% c.15.45% d.13.90% please explain
The expected average rate of return for a proposed investment of $4,150,000 in a fixed asset,...
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The expected average rate of return for a proposed investment of $788,200 in a fixed asset with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total net incom...
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The amount of the estimated average income for a proposed investment of $60,000 in a fixed...
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A. The amount of the estimated average income for a proposed investment of $63,000 in a...
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A. Starling Co. is considering disposing of a machine with a book value of $23,600 and...
A. Starling Co. is considering disposing of a machine with a book value of $23,600 and estimated remaining life of five years. The old machine can be sold for $5,600. A new high-speed machine can be purchased at a cost of $68,700. It will have a useful life of five years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from $23,500 to $19,500 if the new machine is purchased. The differential effect...
Exercise 16-15 Computing the payback period and unadjusted rate of return for the same investment opportunity...
Exercise 16-15 Computing the payback period and unadjusted rate of return for the same investment opportunity LO 16-4 Walton Rentals can purchase a van that costs $114,000; it has an expected useful life of three years and no salvage value. Walton uses straight-line depreciation. Expected revenue is $56,525 per year. Assume that depreciation is the only expense associated with this investment Required a. Determine the payback period. (Round your answer to 1 decimal place.) b. Determine the unadjusted rate of...
At the beginning of 2018, Lindy Weink, the controller of Sunland Inc., reviewed the expected useful...
At the beginning of 2018, Lindy Weink, the controller of Sunland Inc., reviewed the expected useful life and residual value of two of the company's machines and proposed changes as follows Useful Life (in years) Residual Value Machine Date AcquiredCost Original Proposed Original Proposed $42,520 $58,530 $5,110 $3,332 #1 #2 Jan. 1, 2008 Jan. 1, 2016 $752,700 $126,490 20 5 25 Calculate the annual depreciation for each asset using the straight-line method and the original useful life and residual value....
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Average Rate of Return The following data are accumulated by McDermott Motors Inc. evaluating two competing capital investment proposals: Testing Equipment Diagnostic Software $24,000 4 years $0 $2,880 Amount of investment Useful life Estimated residual value Estimated total income over the useful life Determine the expected average rate of return for each proposal. If required, round to one decimal place. $28,000 9 years $0 $13,860 12| X % Testing Equipment Diagnostic Software
Average Rate of Return The following data are...
A. The amount of the estimated average income for a proposed investment of $63,000 in a fixed asset, giving effect to depreciation (straight-line method), with a useful life of four years, no residual value, and an expected total income yield of $23,400, is? Choose the correct answer below. $15,750 $23,400 $8,100 $5,850 B. Hayden Company is considering the acquisition of a machine that costs $490,000. The machine is expected to have a useful life of six years, a negligible residual...
A. Starling Co. is considering disposing of a machine with a book value of $23,600 and estimated remaining life of five years. The old machine can be sold for $5,600. A new high-speed machine can be purchased at a cost of $68,700. It will have a useful life of five years and no residual value. It is estimated that the annual variable manufacturing costs will be reduced from $23,500 to $19,500 if the new machine is purchased. The differential effect...
Exercise 16-15 Computing the payback period and unadjusted rate of return for the same investment opportunity LO 16-4 Walton Rentals can purchase a van that costs $114,000; it has an expected useful life of three years and no salvage value. Walton uses straight-line depreciation. Expected revenue is $56,525 per year. Assume that depreciation is the only expense associated with this investment Required a. Determine the payback period. (Round your answer to 1 decimal place.) b. Determine the unadjusted rate of...
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Average Rate of Return The following data are accumulated by McDermott Motors Inc. evaluating two competing capital investment proposals: Testing Equipment Diagnostic Software $24,000 4 years $0 $2,880 Amount of investment Useful life Estimated residual value Estimated total income over the useful life Determine the expected average rate of return for each proposal. If required, round to one decimal place. $28,000 9 years $0 $13,860 12| X % Testing Equipment Diagnostic Software
Average Rate of Return The following data are...
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