Tipper Co. is considering a 10-year project that is estimated to cost $700,000 and has no residual value. Tipper seeks to earn an average rate of return of 15% on all capital projects. Determine the necessary average annual income
(using straight-line depreciation) that must be achieved on this project for it to be acceptable to Tipper Co.

Question

Tipper Co. is considering a 10-year project that is estimated to cost $700,000 and has no residual value. Tipper seeks to earn an average rate of return of 15% on all capital projects. Determine the necessary average annual income 
(using straight-line depreciation) that must be achieved on this project for it to be acceptable to Tipper Co.

Quizplus · Accepted Answer

The Answer of Tipper Co. is considering a 10-year project that is estimated to cost $700,000 and has no residual value. Tipper seeks to earn an average rate of return of 15% on all capital projects. Determine the necessary average annual income 
(using straight-line depreciation) that must be achieved on this project for it to be acceptable to Tipper Co.

Tipper Co Is Considering a 10-Year Project That Is Estimated to to Cost