1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
soldi70 [24.7K]
3 years ago
5

An investment has an initial cost of $2.7 million and net income of $189,400, $178,600, and $172,500 for Years 1 to 3. The avera

ge book value is $1.35 million. Should this project be accepted based on the average accounting rate of return if the required rate is 12.5 percent? Why or why not?
a. Yes, because the AAR is 12.5 percent
b. Yes, because the AAR is less than 12.5 percent
c. Yes, because the AAR is greater than 12.5 percent
d. No, because the AAR is greater than 12.5 percent
e. No, because the AAR is less than 12.5 percent
Business
1 answer:
DochEvi [55]3 years ago
4 0

Answer: c. Yes, because the AAR is greater than 12.5 percent

Explanation:

Average Accounting rate of return = Average Net Income / Average Assets

Average Net income = (189,400 + 178,600 + 172,000) / 3 years

= $180,166.66667

Average Assets = 2,700,000 / 3 years

= $900,000

Average Account rate of return = 180,166.66667/ 900,000

= 20.01%

<em>The AAR at 20.01% is greater than the required rate which is 12.5% so the project should be accepted. </em>

You might be interested in
Contribution margin is:
ddd [48]

Answer:

Sales less variable production, variable selling, and variable administrative expenses.

Explanation:

On a contribution margin income statement the variable administrative and variable selling are considered as variable cost and used to determinate the contribution margin.

Contribution margin =

sales revenue - total variable cost

the fixed cost are listed below the contriution,

once subtracted from the contribution, the rest is the net income.

8 0
3 years ago
Customers arrive at a common queue at the coffee station with two identical coffee machines in a busy mall at the rate of 48 per
lutik1710 [3]
I am going to say b but idk
7 0
3 years ago
For most people, the purchase of a Ford automobile would employ which type of consumer decision making? a.Generic decision makin
sashaice [31]

Answer:

1. B

2. E

Explanation:

1. Consumer or buyers use the extended decision making as it is that decision making which involves high level of the purchase involvement, extensive internal and the extensive information search with complex evaluation of the alternatives. In case of automobiles, buyers will choose the extended decision making as it is expensive, infrequently purchased products.

2. As there is involvement of high risk of financial loss in the future purchasing power, for people or consumer, the automobiles have the situational involvement, it is the short term state which directs towards the attaching relevance of a situation or person. In other words, it is an state where, it establish a level of involvement when a consumer or person think of a specific situation or object.

8 0
3 years ago
Racz describes a micromanager as a manager who doesn't give you a lot of breathing room. Micromanagers often stifle workers and
marusya05 [52]

Answer:

core competency

Explanation:

A core competency is a concept in management theory introduced by C. K. Prahalad and Gary Hamel. It can be defined as "a harmonized combination of multiple resources and skills that distinguish a firm in the marketplace" and therefore are the foundation of companies' competitiveness.

4 0
3 years ago
Patty took a cash advance of $1,500. Her new credit card charges an Annual Percentage Rate of 21%. The transaction fee for the c
natali 33 [55]
I honestly don’t kno

4 0
3 years ago
Other questions:
  • Differentiation business strategies are often associated with premium prices. There are, however, reasons why a firm would NOT w
    11·1 answer
  • Below is the common equity section (in millions) of Fethe Industries' last two year-end balance sheets:
    9·1 answer
  • Choose an advertisement that you found to be especially memorable. Describe the advertisement and explain how effective it is. D
    7·1 answer
  • Barney, a manager, is very conventional, resistant to change, habitual, and does not accept new ideas very easily. This implies
    5·1 answer
  • 1. Suppose that Intel is considering building a new chip-making factory. Assuming that Intel needs to borrow money in the bond m
    7·1 answer
  • The Capitalpoor Company is considering purchasing business machine for $100,000. An alternative is to rent it for $35,000 at the
    8·1 answer
  • The expected average rate of return for a proposed investment of $4,250,000 in a fixed asset, using straight-line depreciation,
    6·1 answer
  • Angela Moss and Autumn Barber organize a partnership on January 1. Moss's initial net investment is $92,000, consisting of cash
    12·1 answer
  • As chief financial officer, you want to send the fourth quarter profit/loss spreadsheets to the president of the company. How ca
    14·1 answer
  • According to the sarbanes-oxley act, who is responsible for the corporation's financial statements?
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!