Calculate the accounting rate of return for this project

Assignment Help Accounting Basics
Reference no: EM133158270

Question - Your family business has chosen to invest in a project that should generate cash flows of $132,000 per year for 5 years. The initial investment cost is $520,000.

a) Should we accept this project if the required payback period is 4 years.

b) Should we accept this project if the required discounted payback period is 4 years knowing that the discount rate is 4%.

c) Should we accept this project if the minimum rate of return required is 10%.

d) Suppose that each year, the expected annual net benefits of this project constitute 25% of the annual cash flows generated by this project. Calculate the accounting rate of return for this project by considering a linear amortization of the cost of the project.

Reference no: EM133158270

Questions Cloud

What amount of annual contributions to the retirement fund : What amount of annual contributions to the retirement fund are required for to achieve her objective and sleep well at night
Find a mutually satisfactory solution : What is cooperating with the other party to find a mutually satisfactory solution called
Describe the ways in which regulation impacts employee : In this discussion, you will examine ways in which pay decisions and benefits are affected by labor market and product market forces and the effect of regulatio
Strengths and weaknesses of evidence-based recommendations : Strengths and weaknesses of evidence-based recommendations As it relates to voluntary turnover.
Calculate the accounting rate of return for this project : Calculate the accounting rate of return for this project by considering a linear amortization of the cost of the project
Total quality management for organizational success : Total Quality Management for Organizational Success is built mainly on the elements of TQM Foundation, Building Blocks, Building Mortar, and Roof as all these a
Interpret and construct representations of business data : Furry Friends Veterinary Clinic Assignment - Fixed costs such as permits, rent, and insurance are $16384 per year, and monthly utility costs
Support the underrepresented group visible disability : Accommodations, practices, and interventions - to support the specific underrepresented group Visible Disability. You can use real data or examples from organiz
Calculate the effective interest rate on the company loan : A financial institution granted him this amount as a debt over a period of 5 years. Calculate the effective interest rate on the company's loan

Reviews

Write a Review

Accounting Basics Questions & Answers

  What are the limits of external authority

The learned discipline of ethics has been built for thousands of years upon contributions from the likes of Plato, Aristotle, Ralph Waldo Emerson.

  Manufactures airplanes for use in stunt shows

Maverick Wings, Inc. manufactures airplanes for use in stunt shows. Maverick's factory is highly automated, using the latest in robotic technology. To keep costs low, the company employs as few factory workers as possible. Since each plane has dif..

  The primary area of concern identified by management

Geeta & Company has experienced increased production costs. The primary area of concern identified by management is direct labor. The company is considering adopting a standard cost system to help control labor and other costs. Useful historical d..

  Prepare the journal entry for the issuance of the note

Prepare the journal entry for the issuance of the note and the appropriate adjusting entry for the note at December 31, the end of the reporting period.

  What cultural influences on financial reporting in america

Lowly Coffee, Ltd. (a Vietnamese company) is a client of AJJ. What are the cultural influences on financial reporting in America

  On april 1 10000 shares of 5 par common stock were issued

on april 1 10000 shares of 5 par common stock were issued at 22 and on april 7 5000 shares of 50 par preferred stock

  What is inventory recording

The market value of this inventory on December 31 was $33,000. What is inventory recording

  How much interest will you earn in the first year

If you deposit $2,100 in the bank and leave it there, how much interest will you earn in the first year? The second year? The tenth year

  Sam loaned his daughter and her husband 150000 on july 1

sam loaned his daughter and her husband 150000 on july 1 2012 to purchase a new house. the loan is for ten years with

  Calculate depreciation expense for the fiscal years

On March 5, 2020, it purchased, with cash, a cruising boat for $828,000, having a useful life of 10 years, Calculate depreciation expense for the fiscal years

  History of the evolution of directors duties

Give a short history of the evolution of director's duties and responsibilities. Please enumerate their duties and responsibilities today. Are their duties the same in proprietary companies and public companies?

  Prepare the consolidated statement of financial position

ABC Ltd. acquired its shares in XYZ Ltd. during the year, when retained earnings were Tk. 12,500. Prepare the consolidated statement of financial position

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd