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An eight-year project is estimated to cost $336,000 and have no residual value. If the straight-line...

An eight-year project is estimated to cost $336,000 and have no residual value. If the straight-line depreciation method is used and the average rate of return is 9%, determine the estimated annual net income.

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Answer #1

Answer:

Estimated annual net income= Average Rate of Return * Average Investment
= 0.09* [($336,000 + 0)/2]
= 0.09* $168,000
Estimated annual net income = $15,120
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