What is the average accounting rate of return

Assignment Help Financial Management

Reference no: EM131301362

The Nifty Fifty is considering opening a new store at a start-up cost of $628,000. The initial investment will be depreciated straight-line to zero over the 15-year life of the project. What is the average accounting rate of return given the following net income projections?

Years Net Income

1-5 $58,000

6-10 52,000

11-15 44,000

A. 16.42 percent

B. 16.68 percent

C. 17.01 percent

D. 17.18 percent

E. 16.35 percent

Reference no: EM131301362

Questions Cloud

Determine the maximum clock rate for the pipelined mips : Use the timing analyzer to determine the maximum clock rate for the pipelined MIPS implementation, verify correct operation at this clock rate in a simulation, and compare the clock rate to the original non-pipelined MIPS implementation.

Expenses associated with international and global funds : Why are some U.S. investors attracted to international and global bond funds? What risk is associated with these funds that investors are not subject to when investing strictly in U.S. bond funds?

Gathered projected cash flows for two projects : Textiles Unlimited has gathered projected cash flows for two projects. At what interest rate would the company be indifferent between the two projects? Which project is better if the required return is 12 percent?

Identify areas of operation management that business handle : Identify at least two areas of operations management that the business handles well. Think about the topics we have covered in the chapters and relate them to the company you have chosen.

What is the average accounting rate of return : The Nifty Fifty is considering opening a new store at a start-up cost of $628,000. The initial investment will be depreciated straight-line to zero over the 15-year life of the project. What is the average accounting rate of return given the followin..

Equilibrium quantity of credit would change : Explain how the equilibrium real interest rate and the equilibrium quantity of credit would change in each of the following scenarios, and illustrate your answer with a well-labeled graph of the credit market.

How mutual funds generate returns : Describe the three ways a mutual fund can generate returns for investors.- Is a stock mutual fund's past performance necessarily an indicator of future performance?

What is the projects modified internal rate of return : Project M has a cost of $65,125, expected net cash inflows of $13,000 per year for ten years, and a cost of capital of 11%. What is the project's modified internal rate of return?

Compare the pros and cons of mediation and litigation : Compare the pros and cons of mediation, arbitration, and litigation. Include a discussion of how each has traditionally been used, and which method works best for which circumstance.

User Account

All Pages