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 $112,000
Initial investment-working capital 20,000
Net cash inflows from operations (per year for 10 years) 22,000
Disinvestment-depreciable assets 6,000
Disinvestment-working capital 2,000
a. Determine the payback period.
b. Determine the accounting rate of return on initial investment (For parts b. and c., round answers to three decimal places, if applicable. )
c. Determine the accounting rate of return on average investment (For parts b. and c., round answers to three decimal places, if applicable. )
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