Find and calculate the accounting rate of return

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Reference no: EM132972200

Your grandmother gave you a nice amount for your 18th birthday. You don't need the money for urgent matters. So you decide to invest the money in small activity. You buy 19 electric steps at a purchase price of 910 EUR for 1 step and you rent them out for 2 years (so you amortize them on 2 years). At the end of the 2 years you will sell the whole lot of steps for an amount of 3000

EUR (this is the residual value for all steps together). You will rent out the steps for a price of 505 EUR for 1 step for 1 year.

Problem 1: Calculate the Accounting Rate of Return (%).

Reference no: EM132972200

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