Use the information below to answer the following question(s).
Latimer Corporation is considering two alternative investment proposals with the following data:

-What is the accounting rate of return for Proposal Y at Latimer Corporation?

Question

Use the information below to answer the following question(s).
Latimer Corporation is considering two alternative investment proposals with the following data:
 
-What is the accounting rate of return for Proposal Y at Latimer Corporation?

Quizplus · Accepted Answer

A) (Annual net cash flow - depreciation)/Investment = Accounting rate of return
($78,000 - (390,000/8)/390,000 = ($78,000 - 48,350)/390,000 = 7.50%

Use the Information Below to Answer the Following Question(s)