Calculate the average accounting return

Assignment Help Finance Basics
Reference no: EM132616375

You are considering a new product launch. The project will cost $680,000, have a four-year life, and have no salvage value; depreciation is straight-line to zero. Sales are projected at 100 units per year, price per unit will be $19,000, variable cost per unit will be $14,000, and fixed costs will be $150,000 per year. The required return on the project is 15%, and the relevant tax rate is 35%. Ignore the half-year rule for accounting for depreciation.

Calculate the Average Accounting Return (AAR in %)?

Reference no: EM132616375

Questions Cloud

Undertake an analysis of a health service : Undertake an analysis of a health service and consider how well it is prepared to meet the needs of Australia's ageing population
Define effective approaches in leadership and management : In this assignment, you will be writing a 1,000-1,250 word paper describing the differing approaches of nursing leaders and managers to issues in practice.
Company privacy policy : You are asked to locate any company privacy policy. Some of more popular ones might include GOOGLE, APPLE or MICROSOFT, but you may elect to review agency
Prepare Blue November entry : Prepare Blue's November 1 entry, December 31 annual adjusting entry, and May 1 entry for the collection of the note and interest
Calculate the average accounting return : You are considering a new product launch. The project will cost $680,000, have a four-year life, and have no salvage value; depreciation is straight-line to zer
What is the price of the stock today : Investors anticipate that the annual dividend will rise by 6 percent a year forever. The applicable interest rate is 11 percent. What is the price of the stock
Prepare the entry to record bad debt expense : Assume that 10% of accounts receivable will prove to be uncollectible. Prepare the entry to record bad debt expense
Statistical programming languages : Why are statistical programming languages important to data scientists?
Explain how the financial markets and institutions : Explain how the financial markets and institutions caused the Great Recession.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the firms goal with regard to cash collections

What is the firm's goal with regard to cash collections? Describe Field-banking system, Mail-based collection system.

  What is the probability that they both get a hit

1. What is the probability that Joey or Tommy will get a hit? 2. What is the probability that neither player gets a hit? 3. What is the probability that they both get a hit?

  How do you plan to use financial statements

How do you plan to use financial statements in your projected financial statement analysis? Provide rationale for your approach.

  What are the annual incremental cash flows

a. What are the annual incremental cash flows that will be available to Ewert Exploration if it undertakes Plan B rather than Plan A? (Hint: Subtract Plan A's flows from B's.) b. If the firm accepts Plan A, then invests the extra cash generated at th..

  List the federal government major revenue sources

Listing Use a graphic organizer like the one below to list the federal government's major revenue sources.

  Create a statement of cash flows

Bando Corporation has a $300,000 balance in Accounts Receivable and a $4,000 debit balance in Allowance for Doubtful Accounts. Credit sales for the period totaled $1,800,000.

  You brought a house for 151000 with a down payment of

you brought a house for 151000 with a down payment of 30000 which meant you took out a loan for 121000 your interest

  Decision making process in npv or irr valuations

How can a required rate of return that is too high or too low affect the decision making process in NPV or IRR valuations?

  What is the bonds current yield

A bond that matures in 7 years sells for $1020. The bond has a face value of $1000 and a yield to maturity of 10.5883%. The bond coupn pays coupons semiannually. What is the bonds current yield?

  What would the dividend be in 2012

In 2011 Baxter International (BAX-$57.02) earned $3.88 per share and paid a dividend of $1.27 per share. The company expects to earn 4.31 per share in 2012. Assuming BAX would like to keep the same payout ratio, what would the dividend be in 2012?

  Firm days sales in inventory

Efficiency ratio: Gateway Corp. has an inventory turnover ratio of 5.6. What is the firm's days's sales in inventory? Leverage ratio: Your firm has an equity multiplier of 2.47. What is its debt-to-equity ratio?

  Market risk can be eliminated by forming a large portfolio

1. which of the following statements is correct?a. if you add enough randomly selected stocks to a portfolio you can

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