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YouAc€cre trying to determine whether or not to expand your business by building a new manufacturing plant The plant has an installation cost of $174 million which will be depreciated straight

YouAc€?cre trying to determine whether or not to expand your business by building a new manufacturing plant. The plant has an installation cost of $17.4 million, which will be depreciated straight-line to zero over its four-year life.

Required:

If the plant has projected net income of $1,755,000, $2,115,000, $1,974,000, and $1,296,000 over these four years, what is the projectAc€?cs average accounting return (AAR)? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Avg. Accounting Return ____________%

2.  

Consider the following cash flows:
Year Cash Flow
0   Ac€?o$ 32,000  
1     14,200  
2     17,500  
3     11,600  
 
Required:

What is the IRR of the above set of cash flows? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

  Internal rate of return %
 

May 27 2020 View more View Less

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