Information for two alternative projects involving machinery investments follows: Project 1 $ (133,000) 0 17,955 Initial investment Salvage value Annual income Project 2 $ (103,000) 13,000 16,240 a. Compute accounting rate of return for each project. b. Based on accounting rate of return, which project is preferred?

Information for two alternative projects involving machinery investments follows: Project 1 $ (133,000) 0 17,955 Initial investment Salvage value Annual income Project 2 $ (103,000) 13,000 16,240 a. Compute accounting rate of return for each project. b. Based on accounting rate of return, which project is preferred?

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Description: Do not give image format Information for two alternative projects involving machinery investments follows:Project 1$ (133,000)Project 2$ (103,000)13,00016,240Initial investmentSalvage valueAnnual income017,955a. Compute accounting rate of return for

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.3.3P

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Information for two alternative projects involving machinery investments follows: Project 1 Initial investment Salvage value Annual income $ (128,000) Ө Project 2 $ (98,000) 18,000 14,080 11,600 a. Compute accounting rate of return for each project. b. Based on accounting rate of return, which project is preferred? Complete this question by entering your answers in the tabs below. Required A Required B Compute accounting rate of return for each project. Project 1 Project 2 Numerator: Accounting Rate of Return Denominator: Required A Required B Based on accounting rate of return, which project is preferred? Based on accounting rate of return, is preferred. = Accounting rate of return
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Information for two alternative projects involving machinery investments follows. Project 1 requires an initial investment of $148,000. Project 2 requires an initial investment of $133,000. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Project 1 $ 120,000 Project 2 $ 100,000 70,000 25, 000 13,000 $ 12,000 37,000 23,000 25, 000 $ 15,000 Income (a) Compute each project's annual net cash flow. (b) Compute payback period for each investment. Complete this question by entering your answers in the tabs below. Required A Required B Compute each project's annual net cash flow, Annual Amounts Project 1 Project 2 Income Cash Flow Income Cash Flow Sales of new product 120,000 100,000 Expenses Malerials, labor, and overhead (except depreciation) 70.000 37,000 Depreciation-Machinery 25.000 23.000 Seling, general, and administrative expenses 13,000 25,000 Income Net cash flow…