Homework answers / question archive / 1) Newman Automobiles Manufacturing is considering two alternative investment proposals with the following data:   Proposal X Proposal Y Investment $12,000,000 $600,000 Useful life 7 years 8 years Estimated annual net cash inflows for 5 years $2,000,000 $95,000 Residual value $60,000 $30,000 Depreciation method Straight-line Straight-line Required rate of return 12% 10% Calculate accounting rate of return for Proposal X and Proposal Y

1) Newman Automobiles Manufacturing is considering two alternative investment proposals with the following data:   Proposal X Proposal Y Investment $12,000,000 $600,000 Useful life 7 years 8 years Estimated annual net cash inflows for 5 years $2,000,000 $95,000 Residual value $60,000 $30,000 Depreciation method Straight-line Straight-line Required rate of return 12% 10% Calculate accounting rate of return for Proposal X and Proposal Y

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1) Newman Automobiles Manufacturing is considering two alternative investment proposals with the following data:

Calculate accounting rate of return for Proposal X and Proposal Y.