What is the Accounting Rate of Return (ARR)?
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Light company Intends to introduce a soft drink in the market in the next year. The projected revenues and expenses for the next five years are as follows:
Year 1 2 3 4
Revenues 300M 200M 315M 420M
Expenses 160M 50M 115M 200M
The initial capital outlay is 500M which will be
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- The JLK Corporation is considering an investment that will cost RM80,000 and have a useful life of 4 years. During the first 2 years, the net incremental after-tax cash flows are RM25,000 per year and for the last two years they are RM20,000 per year. Calculate the payback period for this investment using a table.The JLK Corporation is considering an investment that will cost RM80,000 andhave a useful life of 4 years. During the first 2 years, the net incremental after-taxcash flows are RM25,000 per year and for the last two years they are RM20,000per year. Calculate the payback period for this investment.An investment of P3M can be made in a business that will produce uniform annual revenue of P1.2M for five years and then have a salvage value of 10% of the investment. Operations and maintenance will be P100, 000 per year. Taxes and insurance will be 5% of the first cost per year. The investor expects to earn not less than 20% before income taxes. Is this a good investment? Use the annual cost method.
- An investment will provide after-tax revenue of $22,336 per year for 7 years. What is the present value of this revenue stream assuming a discount rate of 5.25%?Let's say you have a project which will cost $25mm to build or buy. It will produce after-tax cash flows of $4mm for 9 years with each cash flow occurring at the end of the year. At the end of the 9 years, you will also receive a residual value payment of $3mm after tax. What is the IRR of the project? Round to the nearest one decimal place and use the % symbol. 5.4% would be the form of a correct answer. __________________________Let's say you have a project which will cost $25mm to build or buy. It will produce after-tax cash flows of $4mm for 9 years with each cash flow occurring at the end of the year. At the end of the 9 years, you will also receive a residual value payment of $3mm after tax. What is the IRR of the project? Round to the nearest one decimal place and use the % symbol. 5.4% would be the form of a correct answer. Question 53 options:
- at is the external rate of return for the investment project? Should the new computer system be recommended for purchase? 2. You borrow $280,000 at 4.00% per year and will pay off the loan in equal payments starting one year after the loan is made over a period of ten years. What are the annual end-of-year payments? Determine the amount of interest and principal that are paid each year. What is the total interest paid for the loan? 3. A distillation column is designed purchased and installed for a aoat of $a sill:(Ignore income taxes in this problem.) If an investment of $14,760 now will yield $18,000 at the end of one year, then the internal rate of return for this investment to the nearest whole percentage is: Select one: a. 14% b. 18% c. 22% d. 28%Let's say you have a project which will cost $25mm to build or buy. It will produce after-tax cash flows of $4mm for 9 years with each cash flow occurring at the end of the year. At the end of the 9 years, you will also receive a residual value payment of $3mm. What is the IRR of the project? Round to the nearest one decimal place and use the % symbol. 6.3% would be the form of a correct answer.
- An income-producing property is expected to yield NOI of $100,000 in each of the next five years, with cash flows being received at the end of each period. At the end of the fifth year the property will be sold; the owner wishes to use a going-out cap rate of 7.3% for this transaction. For a cost of capital of 9.5 % annually, what is the value of this property today? Your Answer:A sum of £15,000 is to be invested in a Long-Term Savings Account and growth is projected at 3.25% gross per annum over the next 10 years, subject to tax at the standard rate of 20%. a) Draw the curve to illustrate growth of this investment. b) If no money is withdrawn, calculate how much is in the account after 10 years, after tax. c) There is an opportunity to transfer the investment into an Instant Cash Individual Savings Account, which attracts 1.95% per annum, tax free. Again, if no money is withdrawn, calculate how much theinvestment would be worth after 10 years. d) Comment on your findings above and decide which of the accounts is a better investment and likely togive a better rate of return, bearing in mind that the interest rate of the Individual Savings Account willfluctuate with the bank lending rate.The net present value of an investment is the present value of the expected cash flow minus the initial investment. The company's managers hf. require a 9% return (required rate of return). The managers are considering buying a device that costs ISK 210,000. The device will create a cash flow of ISK 84,000. during the next three years, at the end of each year. What is the net present value of this investment (net present value of investment)? Group of answer choices a. ISK 21,261 b. ISK 212,604 c. ISK 2,629 d. 42,000 ISK