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Project A requires a $415,000 initial investment for new machinery with a five-year life and...

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Accounting

Project A requires a $415,000 initial investment for new machinery with a five-year life and a salvage value of $35,500. Project A is expected to yield annual income of $21,600 per year and net cash flow of $103,750 per year for the next five years. Compute Project A's accounting rate of return. Numerator: Annual income $ 21,600 / Accounting Rate of Return Denominator: Average investment = Accounting Rate of Return Accounting rate of return 0
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Project A requires a $415,000 initial investment for new machinery with a five-year life and a salvage value of $35,500. Project A is expected to yield annual income of $21,600 per year and net cash flow of $103,750 per year for the next five years. Compute Project A's accounting rate of return

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