Multiple Choice
Sivraj Limited is planning to invest £250 000 in a machine. A policy of straight line depreciation will be applied. Determine the ARR.Where the definition of ARR is: Average Profits / Initial Investment x 100 Cash flows arising from the investment, before taking depreciation into account, are estimated as follows:
What is the accounting rate of return on this investment (to one decimal place) ?
A) 19.3%
B) 15.5%
C) 24.0%
D) 20.2%
Correct Answer:
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