ABC Manufacturing is considering an investment in equipment costing RM660,000. The equipment will be depreciated on the straight-line basis over an eight-year period with an estimated residual value of RM120,000. The investment is expected to generate annual net cash inflows of RM135,000 for 8 years. Using the rate of return model, what is the minimum average annual operating income that must be generated from this investment in order to achieve a 14% rate of return?

RM18,900

RM37,800

RM54,600

RM92,400

Answer rating: 100% (QA)

Given Equipment cost 660000 Residual valu... View the full answer