In: Accounting
1. Machine Enterprises is considering an investment proposal with the following cash flows:
Initial investment-depreciable assets | $45,000 |
Net cash inflows from operations (per year for 10 years) | 5,000 |
Disinvestment | 0 |
Determine the accounting rate of return on initial investment and the accounting rate of return on average investment.
2. Great Texas is considering a capital expenditure proposal that requires an initial investment of $9,460, has predicted cash inflows of $2,000 per year for 16 years, and has no salvage value. determine the IRR for the project, if discount rate is 16.
1.Computation for Machine enterprises as folows
2.IRR=20% d
work sheet as follows
Reference for forumula sheet as follows