Doug's Conveyor Systems, Inc., is considering two investment proposals (1 and 2). Data for the two proposals
Question:
__________________________________________________ 1 ___________ 2
Cost of investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $90,000 ......... $65,000
Estimated salvage value . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000 ............ 15,000
Average estimated net income . . . . . . . . . . . . . . . . . . . . . . . 20,000 ............. 8,000
Calculate the return on average investment for both proposals?
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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Proposal 1 Average investment Original cost salvage value 2 90...View the full answer
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Related Book For 
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-1259692406
18th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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