1. Machine Enterprises is considering an investment proposal with the following cash flows: Initial investment-depreciable assets...

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.

Solutions

Expert Solution

1.Computation for Machine enterprises as folows

2.IRR=20% d

work sheet as follows

Reference for forumula sheet as follows

ekkarill92 answered 1 year ago

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