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Using the Information in the Table Below,calculate the ARR A) 3055%
B) 22

Question 40

Multiple Choice

Using the information in the table below,calculate the ARR.
 Expected net cash flows:  - Year 1 $60000 - Year 2 $70000- Year 3 $120000 - Year 4 $90000 - Year 5 $80000Annual depreciation $12000Period of investment5 yearsInitial investment$600000Value at end of the investment period $50000\begin{array}{|l|r|}\hline\text { Expected net cash flows: } \\\text { - Year 1 } & \$ 60000 \\\hline\text { - Year 2 }& \$ 70000 \\\hline \text {- Year 3 }& \$ 120000 \\\hline\text { - Year 4 }&\$ 90000 \\\hline\text { - Year 5 }& \$ 80000 \\\hline \text {Annual depreciation }& \$ 12000 \\\hline \text {Period of investment} & \text {5 years} \\\hline \text {Initial investment} & \$ 600000 \\\hline \text {Value at end of the investment period }& \$ 50000 \\\hline\end{array}


A) 30.55%
B) 22.15%
C) 25.85%
D) 26.18%

Correct Answer:

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