Accounting Rate of Return (ARR) = ? .
1. Solve the following three independent scenarios:
A. If a copy center is considering the purchase of a new copy machine with an initial investment cost of $150,000 and the center expects an annual net
Payback period = ? years.
Round your Payback Period (PB) answer to one decimal place (i.e. 12.3).
B. If a garden center is considering the purchase of a new tractor with an initial investment cost of $120,000, and the center expects a return of $30,000 in year one, $20,000 in years two and three, $15,000 in years four and five, and $10,000 in year six and beyond, what is the payback period?
Payback period = ? years.
Round your Payback Period (PB) answer to one decimal place (i.e. 12.3).
C. A mini-mart needs a new freezer and the initial investment will cost $300,000. Incremental revenues, including cost savings, are $200,000, and incremental expenses, including depreciation, are $125,000. There is no salvage value. What is the accounting
Accounting Rate of Return (ARR) = ? .
Round your ARR answer, in percentage format, to one decimal place (i.e. 12.3%).
Step by step
Solved in 5 steps
