Cardinal Company is considering an investment expected to generate an average net income after taxes of $1,300 for three years. The investment costs $30,000 and has an estimated $4,000 salvage value . Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation.
Chapter 25, Quick Study #4
Cardinal Company is considering an investment expected to generate an average net income after taxes of $1,300 for three years. The investment costs $30,000 and has an estimated $4,000 salvage value. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation.
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
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Related Book For 
Fundamental Accounting Principles
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
ISBN: 978-0078110870