ACCOUNTING RATE OF RETURN Eyring Company invested $10,000,000 in a new product line. The life cycle of the product is projected to be seven years with the following net income stream: $200,000 $600,000, $1,000,000, $1,200,000, $1,600,000, $2,200,000, and $1,600,000.
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ACCOUNTING RATE OF RETURN
Eyring Company invested $10,000,000 in a new product line. The life cycle of the product is projected to be seven years with the following net income stream: $200,000 $600,000, $1,000,000, $1,200,000, $1,600,000, $2,200,000, and $1,600,000.
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- Accounting Rate of Return Vanderhoort Company invested $10,370,000 in a new product line. The life cycle of the product is projected to be seven years with the following net income stream: $360,000, $360,000, $600,000, $1,080,000, $1,200,000, $2,520,000, and $1,444,000. Required: Calculate the ARR. Enter your answer as a decimal, do not convert to a percent. Round your answer to two decimal places.You are given the following financial data about a new system to be implemented at a company: Investment cost at n = 0: $20,000. Investment cost at n = 1: $10,000. Useful life: 10 years. Salvage value (at the end of 11 years): $6,000. Annual revenues: $15,000 per year. Annual expenses: $5,000 per year. MARR: 10%. Note that the first revenues and expenses will occur at the end of year 2. (a) Determine the conventional-payback period. (b) Determine the discounted-payback period.Accounting Rate of Return Uchdorf Company invested $10,280,000 in a new product line. The life cycle of the product is projected to be seven years with the following net income stream: $360,000, $360,000, $600,000, $1,080,000, $1,200,000, $2,520,000, and $1,444,000. Required: Calculate the ARR. Enter your answer as a decimal, do not convert to a percent. Round your answer to two decimal places. Feedback Check My Work Average Net Income Accounting Rate of Return Investment Review the "How to Calculate the Accounting Rate of Return" example in the text.
- Accounting Rate of Return Uchdorf Company invested $10,280,000 in a new product line. The life cycle of the product is projected to be seven years with the following net income stream: $360,000, $360,000, $600,000, $1,080,000, $1,200,000, $2,520,000, and $1,444,000. Required: Calculate the ARR. Enter your answer as a decimal, do not convert to a percent. Round your answer to two decimal places.A company has just spent $189,000 in purchase of new equipment for its production business. This equipment is expected to generate an additional $55,000 in annual profit in the first year. The annual profit is projected to increase by 6% each subsequent year up to 10 years, the service life of the equipment. Calculate the present worth of this investment if the profits can earn an interest rate of 10% per year. OA. $427,457 OB. $220,734 OC. $914,980 OD. $236,632A company expects the cost of equipment maintenance to be $5,000 in year one, $5,500 in year two, and amounts increasing by $500 per year through year 10. At an interest rate of 10% per year, the present worth of the maintenance cost is nearest to A.$51,790 B.$42,170 C.$46,660 D.$38,220
- The cost for manufacturing a component used in intelligent interface converters was $23,000 the first year. The company expects the cost to increase by 2% each year. Calculate the present worth of this cost over a five-year period at an interest rate of 10% per year.A company expects the cost of equipment maintenance to be $5,000 in year one, $5,500 in year two, and amounts increasing by $500 per year through year 10. At an interest rate of 10% per year, the present worth of the maintenance cost is nearest to A) $38,220 B $46,660 c) $51,790 D) $42,170An initial investment of $40,000 in Blue's Bunks is expected to pay off greatly-but not equally-in each of the next 5 years. The company expects a small increase in operating income in year 1 of $4,500, but then steadily larger improvements in profitability in years 2-5: $10,000, $21,875, $20,750, and $24,625, respectively. The year prior to this investment, the company's ARR was 9%, and its tax rate was 20%. What level of ARR does this projection provide? (Round answer to 2 decimal places, e.g. 15.25%.) ARR 87.94 % Is it likely that the company will move forward with this investment? Yes
- An initial investment of $40,000 in Kingbird's Bunks is expected to pay off greatly-but not equally-in each of the next 5 years. The company expects a small increase in operating income in year 1 of $5,500, but then steadily larger improvements in profitability in years 2-5: $9,625, $21,000, $18,125, and $27,250, respectively. The year prior to this investment, the company's ARR was 9%, and its tax rate was 20%. What level of ARR does this projection provide? (Round answer to 2 decimal places, e.g. 15.25%.) ARR % Is it likely that the company will move forward with this investment?An initial investment of $60,000 in Novak's Bunks is expected to pay off greatly-but not equally-in each of the next 5 years. The company expects a small increase in operating income in year 1 ($4,875), but then steadily larger improvements in profitability in years 2-5: $10,000, $19,500, $22,000, and $26,125, respectively. The year prior to this investment, the company's ARR was 9%, and its tax rate was 20%. What level of ARR does this projection provide? (Round answer to 2 decimal places, e.g. 15.25%.) ARR Your answer is partially correct. Yes 51.89 % Is it likely that the company will move forward with this investment?Ace Hardware is adding a new product line that will require an investment of $1,512,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $310,000 the first year, $280,000 the second year, and $260,000 each year thereafter for eight years. Compute the payback period. Round to one decimal place Net Cash Outflows Net Cash Inflows Year Amount Invested Annual Accumulated 0 1 2 3 4 5 Now that you understand how to fill in the payback schedule, the rest has been done for you. Review the table and determine between what years the payback will occur. The payback will occur after years, but before years. Now let's calculate the amount needed to complete recovery after year 5. Amount recovered Amount needed to complete Investment - at…
