How long is the payback period for Proposal X? 1b. What is the accounting rate of return for Proposal Y? 2. You have been awarded a scholarship that will pay you $500 per semester at the end of each of the next 8. semesters that you earn a GPA of 3.5 or better. You are a very serious student and you anticipate receiving the. scholarship every semester. For investment appraisal purposes, PV Co uses a nominal (money) discount rate of 10% per year and a target return on capital employed of 30% per year. Ignore taxation. Required: (a) Calculate the following values for the investment proposal: (iii) return on capital employed (accounting rate of return) based on average investment. (3 marks) Calculate the accounting rate of return for Proposal Y. (Round any intermediate calculations and your final answer to two decimal places.) asked Sep 2, 2018 in Business by DaFunk Tiberius Manufacturing is considering two alternative investment proposals with the following data: Consider the following exampleRequired: Using accounting rate of return method, select the best investment proposal for the companySolution:If only accounting rate of return is considered, the proposal B is the best proposal for Super Friends manufacturing company because its expected accounting rate of return is the highest among three proposals. 12) The accounting rate of return is also known as average rate of return or annual rate of return. 13) The accounting rate of return method evaluates the lifetime return of an asset, whereas return on investment evaluates an annual return.

## Consider the following exampleRequired: Using accounting rate of return method, select the best investment proposal for the companySolution:If only accounting rate of return is considered, the proposal B is the best proposal for Super Friends manufacturing company because its expected accounting rate of return is the highest among three proposals.

Accounting rate of return, also known as the Average rate of return, or ARR is a financial ratio used in capital budgeting. The ratio does not take into account the Payback period analysis; Accounting rate of return; Net present value; Internal CFx = cash flow in period x, n = the number of periods, and r = the discount rate. Assume that alternative proposals X and Y are being compared. if the desired rate of return is 10%, each proposals net present value could be determined as How long is the payback period for Proposal X? b. What is the accounting rate of return for Proposal Y? 2. You have been awarded a scholarship that will pay The Payback Period method of evaluating an investment proposal is very popular The Accounting Rate of Return (ARR) is calculated by dividing the Average annual profit ARR = Average annual profit after tax /Average investment x 100.

### How long is the payback period for Proposal X? b. What is the accounting rate of return for Proposal Y? 2. You have been awarded a scholarship that will pay

If only accounting rate of return is considered, the proposal B is the best proposal for Good Year manufacturing company because its expected accounting rate of return is the highest among three proposals. The accounting rate of return formula is calculated by dividing the income from your investment by the cost of the investment. Usually both of these numbers are either annual numbers or an average of annual numbers. You can also use monthly or even weekly numbers. The time length doesn’t matter. Required rate of return. Proposal Y. $850,000. $468,000. 8 years. $125,000. $40,000. 8 years. $78,000 $-Straight-line Straight-line. 14%. 10%. 1a. How long is the payback period for Proposal X? 1b. What is the accounting rate of return for Proposal Y? 2. You have been awarded a scholarship that will pay you $500 per semester at the end of each of the next 8 Moreover, the accounting profit can be readily calculated from the accounting records. 6. This method satisfies the interest of the owners since they are much interested in return on investment. 7. This method is useful to measure current performance of the firm. Disadvantages or Weakness or Limitations of Accounting Rate of Return Method How long is the payback period for Proposal X? 1b. What is the accounting rate of return for Proposal Y? 2. You have been awarded a scholarship that will pay you $500 per semester at the end of each of the next 8. semesters that you earn a GPA of 3.5 or better. You are a very serious student and you anticipate receiving the. scholarship every semester. For investment appraisal purposes, PV Co uses a nominal (money) discount rate of 10% per year and a target return on capital employed of 30% per year. Ignore taxation. Required: (a) Calculate the following values for the investment proposal: (iii) return on capital employed (accounting rate of return) based on average investment. (3 marks) Calculate the accounting rate of return for Proposal Y. (Round any intermediate calculations and your final answer to two decimal places.) asked Sep 2, 2018 in Business by DaFunk Tiberius Manufacturing is considering two alternative investment proposals with the following data:

### 28 Jan 2020 The accounting rate of return (ARR) measures the amount of profit, or return, expected on investment as compared with the initial cost.

Accounting rate of return, also known as the Average rate of return, or ARR is a financial ratio used in capital budgeting. The ratio does not take into account the Payback period analysis; Accounting rate of return; Net present value; Internal CFx = cash flow in period x, n = the number of periods, and r = the discount rate.

## Project X. Payback Period. 3.8 Years. 2.8 Years. Accounting Rate of Return. 16%. 14%. Net Present Value. Rs. 880,000. Rs. 610,000. Which of the following is

Assume that alternative proposals X and Y are being compared. if the desired rate of return is 10%, each proposals net present value could be determined as How long is the payback period for Proposal X? b. What is the accounting rate of return for Proposal Y? 2. You have been awarded a scholarship that will pay