The following data concerns a proposed equipment purchase: cost $144,000 salvage value $4,000 estimated useful life 4 years annual net cash flows $46,100 depreciation method straight-line assuming that net cash flows are received evenly throughout the year, the accounting rate of return is:

a. 7.7%.
b. 15.0%.
c. 5.0%.
d. 62.3%.
e. 32.0%.

Option (B) is correct

Explanation:

Depreciation expense:

= (cost - salvage value) ÷ estimated useful life

= ($144,000 - $4,000) ÷ 4

= $35,000

Average investment:

= (cost + salvage value) ÷ 2

= ($144,000 + $4,000) ÷ 2

= $74,000

Net income:

= Annual net cash flows - Depreciation expense

= $46,100 - $35,000

= $11,100

Accounting rate of return:

= (Net Income ÷ Average investment) × 100

= ($11,100 ÷ $74,000) × 100

= 15%

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi

answer; situational irony;