The Crystal Company uses straight-line depreciation and is considering a capital expenditure for which the following relevant cash flow data have been estimated: Estimated useful life: 3 years Initial investment: $400,000 Savings year 1: $160,000 Savings year 2: $150,000 Savings year 3: $90,000 Residual value after 3 yrs $30,000 The accounting rate of return is closest to 37.50%. 15.00%. 0.53%. 2.50%.
The Crystal Company uses straight-line depreciation and is considering a capital expenditure for which the following relevant cash flow data have been estimated: Estimated useful life: 3 years Initial investment: $400,000 Savings year 1: $160,000 Savings year 2: $150,000 Savings year 3: $90,000 Residual value after 3 yrs $30,000 The accounting rate of return is closest to 37.50%. 15.00%. 0.53%. 2.50%.
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter8: Investing Activities
Section: Chapter Questions
Problem 1.3AIC: Estimate the average total estimated useful life of depreciable property, plant, and equipment....
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The Crystal Company uses straight-line
depreciation and is considering a capital expenditure for which the following relevant cash flow data have been estimated:
Estimated useful life: 3 years Initial investment: $400,000 Savings year 1: $160,000 Savings year 2: $150,000 Savings year 3: $90,000 Residual value after 3 yrs $30,000
The accountingrate of return is closest to37.50%.15.00%.0.53%.2.50%.
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