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Determine the average return on investment

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Reference no: EM133034059

Problem - The Chum Company is considering the production of a new product line which will require an investment of P3,000,000 with P200,000 salvage value. The investment will have a useful life of ten years during which annual cash inflows before income tax of P1,400,000 are expected. The income tax rate is 40%.

Required -

1. Determine the annual net income.

2. Determine the average return on investment.

3. Determine the average return on average investment.

Reference no: EM133034059

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