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Homework answers / question archive / Calculations (Methods of Determining Best Alternative Investments (2 points each
Calculations (Methods of Determining Best Alternative Investments (2 points each. Get it all right or it's counted wrong): 45. Calculate the values needed to esimate the average rates of return on the following after tax investments. Then state which investment you would recommend to your boss. Year 4 Year 1 600 Year 2 500 Year 3 200 Average 450 500 Investment A Benefits Value of Investment 1 January 31 December Average 1000 800 900 750 600 675 600 400 500 400 0 200 568.75 a. What is the average rate of return on Investment A =
After tax benefits of Investment B Year 1 800 Year 2 500 Year 3 100 Year 4 500 Average 475 Investment B Benefits Value of Investment 1 January 31 December Average 450 1000 900 950 900 450 675 400 425 400 0 200 562.50 b. What is the average rate of return on Investment B = c. Which Investment should you recommend to your boss A or B?
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