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Question
A company buys a machine for $60,000 that has an expected life of nine years and no salvage value. The company anticipates a yearly net income of $2,850 after taxes of 30%, with the cash flows to be received evenly throughout of each year. What is the accounting rate of return?
A. 2.85%
B. 4.75%
C. 6.65%
D. 9.50%
E. 42.75%
Answer
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Related questions
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The _______________________________ is computed by dividing a project's after-tax net income by the average amount invested in it.
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A. Sell the units as scrap.
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C. It does not matter because both alternatives have the same result.
D. Neither sell nor rebuild because both alternatives produce a loss. Instead, the company should store the units permanently.
E. Throw the units away.
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Q:
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Q:
Periods
12 Percent 1
8929 2
1.6901 3
2.4018 4
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B. $(251.52) and Scott would be willing to pay $29,748.48 for the machine.
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Q:
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B. It includes the time value of money.
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Q:
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Q:
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42
25 A. 15,000 croquet sets.
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B. Neither product A nor product B should be processed further.
C. Only product B should be processed further.
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E. A processing further decision cannot be made from the available data.
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B. Income will increase by $7 per unit.
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$3 Fixed costs (in total) Overhead
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D. $50
E. $5
Q:
Assume markup percentage equals desired profit divided by total costs. What is the correct calculation to determine the dollar amount of the markup per unit?
A. Total cost times markup percentage.
B. Total cost per unit times markup percentage per unit.
C. Total cost per unit divided by markup percentage per unit.
D. Markup percentage per unit divided by total cost per unit.
E. Markup percentage divided by total cost.
Q:
Capital budgeting decisions are generally based on:
A. Tentative predictions of future outcomes.
B. Perfect predictions of future outcomes.
C. Results from past outcomes only.
D. Results from current outcomes only.
E. Speculation of interest rates and economic performance only.
Q:
If net present values are used to evaluate two investments that have equal costs and equal total cash flows, the one with more cash flows in the early years has the higher net present value.