taxis Industries is considering a project that would involve the purchase and refitting of a new manufacturing facility.The following information is known about this project: The initial cost of the purchase and refit of the facility is $300,000,000.There is expected to be no salvage value.
The facility can be depreciated using straight- line depreciation over a four- year life The current tax rate is 36%
A)What is the average accounting rate of return on the project?
B)Based upon this result should Tavis Industries accept this project?

Question

taxis Industries is considering a project that would involve the purchase and refitting of a new manufacturing facility.The following information is known about this project:  The initial cost of the purchase and refit of the facility is $300,000,000.There is expected to be no salvage value.
The facility can be depreciated using straight- line depreciation over a four- year life The current tax rate is 36%
A)What is the average accounting rate of return on the project? 
B)Based upon this result should Tavis Industries accept this project?

Quizplus · Accepted Answer

The Answer of taxis Industries is considering a project that would involve the purchase and refitting of a new manufacturing facility.The following information is known about this project:  The initial cost of the purchase and refit of the facility is $300,000,000.There is expected to be no salvage value.
The facility can be depreciated using straight- line depreciation over a four- year life The current tax rate is 36%
A)What is the average accounting rate of return on the project? 
B)Based upon this result should Tavis Industries accept this project?

Taxis Industries Is Considering a Project That Would Involve the Purchase