27th Edition
WARREN + 5 others
ISBN: 9781337272094




27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Average rate of return

Determine the average rate of return for a project that is estimated to yield total income of $180,000 over five years, has a cost of $400,000, and has a $50,000 residual value.

To determine

Average Rate of Return:

Average rate of return is a method that measures the average earnings of a particular business, as a percentage of the average investment. It is also known as accounting rate of return.

Calculation of Average rate of return:


To determine: The average rate of return for a project.


The average rate of return for the project is 16%.

Working Notes:

Calculation of Average Rate of Return:


(Refer equation (1) and (2) of the working notes)

Calculation of Average Annual Income:


Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Describe the four steps in the closing process.

Cornerstones of Financial Accounting

Give three examples of important trade-offs that you face in your life.

Principles of Microeconomics (MindTap Course List)

What are the main objectives of performance appraisal?

Foundations of Business (MindTap Course List)

Explain how absolute advantage and comparative advantage differ.

Essentials of Economics (MindTap Course List)

What is the purpose of a range check?

Accounting Information Systems

EQUILIBRIUM STOCK PRICE The risk-free rate of return, rRF, is 6%; the required rate of return on the market, rM...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

LO2 All sales, for cash or on credit, are recorded in the sales journal.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

How does competition arise out of scarcity?

Economics (MindTap Course List)