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Nearest to thousand OR
please explain the term nearest to whole figure.4.14
4.5
4.47
4.6Initial cost: $300,000
Expected life: 5 years
Estimate scrap value: $20,000
Addition revenue from project: $120,000 per year
Incremental costs from project: $30,000 per year
Cost of Capital: 10%calculate the accounting rate of return
What has this to do with your previous post?
You must start a new thread when asking a different question!
The average profit after depreciation = (120,000 – 30,000) – (300,000 – 20,000)/5 = 34,000 per year.
The average value of the project = (300,000 + 20,000) / 2 = 160,000The ARR = 34,000/160.000 = 21.25%
Have you watched my free lectures on investment appraisal?
The lectures are a complete free course for Paper F2 and cover everything needed to be able to pass the exam well.
Thank you :)….
Next time I will care.
In previous post SIR I asked about What is meant by ( rounding figures)?
Sometimes I face difficulty in MOCK.
Next time I’ll post the whole question for complete explaination :)….
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