(a) Year A fleet of buses is purchased for 1,000,000. Each year the buses allows the...

Transcribed Image Text:

(a) Year A fleet of buses is purchased for 1,000,000. Each year the buses allows the business to generate the revenues below. There are also maintenance costs which must be deducted to get net revenues. 0 day of purchase 1 2 3 4 5 Totals Costs -1,000,000 -10,000 -12,000 -13,000 -14,000 -12,000 Revenues 0 250,500 350,000 400,000 375,000 310,000 Net Revenues Net Profit (a) Calculate the ARR (Average Rate of Return) for this bus acquisition project. [10] (a) Year A fleet of buses is purchased for 1,000,000. Each year the buses allows the business to generate the revenues below. There are also maintenance costs which must be deducted to get net revenues. 0 day of purchase 1 2 3 4 5 Totals Costs -1,000,000 -10,000 -12,000 -13,000 -14,000 -12,000 Revenues 0 250,500 350,000 400,000 375,000 310,000 Net Revenues Net Profit (a) Calculate the ARR (Average Rate of Return) for this bus acquisition project. [10]

Answer rating: 100% (QA)

To calculate the Average Rate of Return ARR for the bus acquisition project ... View the full answer