What is the project average accounting return

Assignment Help Financial Management
Reference no: EM131524838

You’re trying to determine whether to expand your business by building a new manufacturing plant. The plant has an installation cost of $12380, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of $2118, $2624, $2765, and $2362 over these four years, what is the project’s average accounting return (AAR)? (Enter your answer as a percentage, omit the "%" sign in your response, and round your answer to 2 decimal places. For example, 0.12345 or 12.345% should be entered as 12.35.)

Reference no: EM131524838

Questions Cloud

Accumulate the required amount to buy house of your dream : How much money should you place in this savings account every month in order to accumulate the required amount to buy the house of your dreams?
What is the project payback period if the initial cost : What is the project payback period if the initial cost is $2388?
What is discounted payback period if discount rate is zero : What is the discounted payback period if the discount rate is zero percent?
Find the price of stock that is expected to pay a dividend : Find the price of a stock that is expected to pay a dividend of $2 next year (period 1).
What is the project average accounting return : You’re trying to determine whether to expand your business by building a new manufacturing plant. what is the project’s average accounting return (AAR)?
What is the npv for the project if the required return : What is the NPV for the project if the required return is 7 percent?
Accepting the project and rejecting : At what discount rate would you be indifferent between accepting the project and rejecting it?
The relationship between the interest rate on a bond : The relationship between the interest rate on a bond and its time to maturity is referred to as
Find the required return on the common stock : Find the required return on the common stock of your assigned firm. To do this, first find the beta using the market model.

Reviews

Write a Review

Financial Management Questions & Answers

  What are arithmetic and geometric average returns for stock

What are the arithmetic and geometric average returns for a stock with annual returns of 21 percent, 9 percent, –2 percent, and 13 percent? List the arithmetic answer first.

  Cash flow amount to use initial investment in fixed assets

Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $4.5 million in anticipation of using it as a warehouse and distribution site, but the comp..

  What is invoice price of bond

A coupon bond paying semiannual interest is reported as having an ask price of 125% of its $1,000 par value. what is the invoice price of the bond?

  Forecasting risk is defined as the possibility

Forecasting risk is defined as the possibility that:

  Future value-present value for various compounding periods

Present value for various discounting periods. Find the present value of $700 due in the future under each of these conditions: Future value for various compounding periods- Find the amount to which $800 will grow under each of these conditions

  Foreseeable future-the real risk-free rate of interest

In the foreseeable future, the real risk-free rate of interest, r*, is expected to remain at 3%, inflation is expected to steadily increase, and the maturity risk premium is expected to be 0.1(t 1)%, where t is the number of years until the bond matu..

  The target capital structure consists

Sorensen System's Inc. is expected to pay a $2.50 dividend at year end (D1=$2.50), the dividend is expected to grow at a constant rate of 5.50% each year, and the common stock currently sells for $52.50 a share. The before-tax cost of debt is 7.50% a..

  Markets efficiency is affected by the number of transactions

Do you think a market's efficiency is affected by the number of transactions that take place, the amount of time it takes to complete the transaction and the number of buyers and sellers present? How do these questions relate to the Primary and Secon..

  Annual revenue each year for the next seven years

Your company will generate $50,000 in annual revenue each year for the next seven years from a new information database. If the interest rate is 4%, what is the present value of the savings?

  Bond with a face value

A bond with a face value of $1,000 has annual coupon payments of $100 and was issued 7 years ago. The bond currently sells for $1,000 and has 8 years remaining to maturity. This bond’s must be 10%. I. yield to maturity II. Market premium III. coupon ..

  Review the gear sports statement of values

Review the Gear sports statement of values and then identify the two items that you believe contribute the most to a salesperson’s career success.

  What is the free cash flow to the equity holders of the firm

If the tax rate is 30% and the net debt of the firm increased by $45 million, what is the free cash flow to the equity holders of the firm?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd