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Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows with Disinvestment

Minn is considering an investment proposal with the following cash flows:

Initial investment-depreciable assets $84,000

Net cash inflows from operations (per year for 10 years) 12,000

Disinvestment-depreciable assets 22,000

For parts b. and c., round answers to three decimal places, if applicable.

a. Determine the payback period.

____ years

b. Determine the accounting rate of return on initial investment.

_____Answer

c. Determine the accounting rate of return on average investment.

______Answer

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92818291

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