Find the accounting return on investment for a project

Assignment Help Management Theories

Reference no: EM131385347

Define internal rate of return.

a. Find the accounting return on investment for a project that costs $10,000, will have no salvage value, and has expected annual aftertax profits each year of $1,000.

b. Determine the payback period for a capital investment that costs $40,000 and has the following after-tax profits. (The projected outlay of $40,000 will be depreciated on a straight-line basis over 7 years to a zero salvage value.)

Year	After-Tax Profits
1	$4,000
2	5,000
3	6,000
4	6,500
5	6,500
6	6,000
7	5,000

Reference no: EM131385347

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