Payback Period and Accounting Rate of Return: Equal Annual Operating Cash Flows with Disinvestment
Minn is considering an investment proposal with the following cash flows:
Initial investment-depreciable assets $84,000
Net cash inflows from operations (per year for 10 years) 12,000
Disinvestment-depreciable assets 22,000
For parts b. and c., round answers to three decimal places, if applicable.
a. Determine the payback period.
____ years
b. Determine the accounting rate of return on initial investment.
_____Answer
c. Determine the accounting rate of return on average investment.
______Answer