. A fixed capital investment of P12M is required for a production plant and an estimated working capital of P3M. Annual Depreciation is estimated to be 15% of the capital investment. Determine the rate of return on the total investment and the length of time to recover it if the annual profit is $2.8M.

. A fixed capital investment of P12M is required for a production plant and an estimated working capital of P3M. Annual Depreciation is estimated to be 15% of the capital investment. Determine the rate of return on the total investment and the length of time to recover it if the annual profit is $2.8M.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 1BE: Average rate of return Determine the average rate of return for a project that is estimated to yield...

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