A project that cost $72000 has a useful life of 5 years and a salvage value of $3000. The internal rate of return is 12% and the annual rate of return is 18%. The annual net income is A project that cost $72000 has a useful life of 5 years and a salvage value of $3000. The internal rate of return is 12% and the annualrate of return is 18%. The annual net income is$6750.Ⓒ$6210.O $4500.O $4140.

Average investment = (Initial investment + Salvage value)/2 Annual net income= (Average investment X…

Answered: A project that cost $72000 has a useful…

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A project that cost $72000 has a useful life of 5 years and a salvage value of $3000. The internal rate of return is 12

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 18EB: Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

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A project that cost $72000 has a useful life of 5 years and a salvage value of $3000. The internal rate of return is 12% and the annual rate of return is 18%. The annual net income is

Definition Definition Discount rate of a project wherein its net present value equals zero. Internal rate of return equates the present value of future cash flows with the initial investments. Internal rate of return helps to determine nominal cash flows.

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