contestada

Cullumber Company is considering buying equipment for $220000 with a useful life of 5 years and an estimated salvage value of $6000. If annual expected income is $28000, the denominator in computing the annual rate of return is $226000. $110000. $113000. $220000.

Respuesta :

Kolawole845

Answer:

Average investment(denominator) = $113,000

Explanation:

Annual rate of return is the average annual income as a percentage of average investment . It is the proportion of the average investment that is earned, on the average, as annual income.

Annual rate of return = annual net income/ average investment

Average investment =( Initial,cost + scrap value)/2

Average investment = (220,000 + 6,000)/2= $113,000

Average investment(denominator) = $113,000

Otras preguntas