Management is considering a $100,000 investment in a project with a five-year life and no residual value. If the total income from the project is expected to be $60,000 and recognition is given to the effect of straight-line depreciation on the investment, the average\ rate of return is: A. 12% B. 24% C. 60% D. 75%   Q

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
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Problem 2E: Average rate of returncost savings Maui Fabricators Inc. is considering an investment in equipment...
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Management is considering a $100,000 investment in a project with a five-year life and no residual value. If the total income from the project is expected to be $60,000 and recognition is given to the effect of straight-line depreciation on the investment, the average\ rate of return is:

A. 12%

B. 24%

C. 60%

D. 75%

 

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