What will be the average accounting return

Reference no: EM132059582

Question: A project will last for four years. The initial cash investment will be $240. The project will provide a net income of $80 for each of the four years. Depreciation will be on a straight-line basis over the four years, and there will be no salvage value. The required rate of return is 10 percent.

1. What will be the total net income over the life of the project?

2. What will be the average accounting return (in %)

3. What will be the operating cash flow (OCF) for all four years (not adjusted for time)?

4. What will be the net present value?

5. What will be the payback period (assume funds come in daily)?

6. What will be the discounted payback period?

7. What will be the profitability index?

Reference no: EM132059582

Questions Cloud

Find the dimensions that give the maximum area : A farmer wishes to enclose a rectangular pasture with 360ft of fence. Find the dimensions that give the maximum area in these situations:

Water level dropping at noon today : How fast, in feet per hour, was the water level dropping at noon today?

What is williamson unlevered cost of equity capital : What is Williamson’s cost of equity capital? What is Williamson’s unlevered cost of equity capital?

Estimate a reasonable price for the shares : Your boss has suggested that you use the comparative P/E Ratio for another similar firm to put a reasonable price on the stock.

What will be the average accounting return : A project will last for four years. The initial cash investment will be $240. The project will provide a net income of $80 for each of the four years.

Evaluate the stricklers cash conversion cycle : What would Strickler's cash conversion cycle have been if the inventory turnover had been 8 for the year?

The value of this option as calculated by black-scholes : Nowel Inc. stock is currently priced at $42. the present value of the strike price of a call option on this stock is $44. The value of this option as calculated

Computing the profitability index of the project : A project has an initial outlay of $4, 074. It has a single payoff at the end of year 2 of $8, 382. What is the profitability index (PI) of the project.

What is the depreciation expense in given year : A project requires $224,848 of equipment that is classified as 7-year property. What is the depreciation expense in Year 5 given the following MACRS.

User Account

All Pages