Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. * ops:the course im studying is finance and invest

* OPS:The course im studying is finance and investment, DO NOT use handwriting or exel...

50.1K

Verified Solution

Question

Finance

* OPS:The course im studying is finance and investment, DO NOT use handwriting or exel to answer please.

Calculate the Average Accounting Return (AAR) for the following investment and make one assessment of whether the company should make the investment. Comment on your results. The basic investment is 600,000 dollar and the economic life is estimated at 3 years. The investment is estimated to generate a turnover in year 1 of 500,000 dollar, year 2 of 450,000 dollar and year 3 of 350,000 dollar. The production costs for the investment are estimated for year 1 to be 200,000,dollar year 2 for 150,000 dollar and year 3 of 100,000.dollar The administrative costs for year 1 are estimated to be 50,000 dollar, year 2 for 50,000 dollar and year 3 of 20,000 dollar. The corporate tax is 22% and the company assumes that an investment must have an AAR of at least 10% to be considered profitable.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Biology
1.2K views

What are the two main measures of diversity? Do you understand how to plot a species...

Psychology
1.2K views

what would a researcher use this t-test for? Provide an example.

Biology
1.2K views

2 Book Ferences Fatigue COVID 19 exhibited a long list of possible signs and symptoms...

Biology
1.2K views

Match the following descriptions with gene structures DNA sequences that are 5 upstream and 3...

Geometry
1.2K views

Given AB II CD AB CD Prove AE CE A D E B

Basic Math
1.2K views

Classify 16 4 x expression O equation Identify the variables coefficients and constants Enter your...

Statistics
1.2K views

Given the two points write the equation in slope intercept form 4 1 and 8...

Accounting
1.2K views

XS Supply Company is developing its annual financial statements at December 31. The...

Accounting
1.2K views

Cash $ 66,600 32,400 Accounts Receivable 22,080 19,800 Inventory 18,800 28,800 Prepaid expenses 1,000 500...

Accounting
1.2K views

0.15 A product is currently being manufactured on an old machine. The costs of the...

Accounting
1.2K views

The charter of Holly Corporation authorizes the issuance of 1,000 sharas of proferred thock and...

Accounting
1.2K views

1. A new manager of a retail company suggests that the company should prepare its...