HOP Ltd forecasts cash flows of 30,000 per annum for four years. It will invest 80,000 in
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HOP Ltd forecasts cash flows of £30,000 per annum for four years. It will invest £80,000 in fixed assets having a four-year life and no residual value.
Calculate:
(a) the accounting rate of return
(b) the internal rate of return.
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Lets start with the Accounting Rate of Return ARR The ARR is the average net income an asset is expected to generate divided by its average capital co...View the full answer
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