Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows with Disinvestment Roopali...
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Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows with Disinvestment Roopali is considering an investment proposal with the following cash flows:
| Initial investment-depreciable assets | $100,000 |
| Initial investment-working capital | 20,000 |
| Net cash inflows from operations (per year for 5 years) | 24,000 |
| Disinvestment-depreciable assets | 20,000 |
| Disinvestment-working capital | 20,000 |
For parts b. and c., round answers to three decimal places, if applicable.
a. Determine the payback period. Answer years
b. Determine the accounting rate of return on initial investment Answer
c. Determine the accounting rate of return on average investment Answer
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