. Calculate Press's Free Cash Flow (FCF) per year. Exhibit 2 Information on Plywood Presses Example...

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. Calculate Press's Free Cash Flow (FCF) per year. Exhibit 2 Information on Plywood Presses Example of the Average Accounting Rate of Return The example assumes that a project's cost is depreciated over the life of the project on a straight line basis Year 1 4 Initial Project Cost Accumulated Depreciation Book Value 4 6. 8. 4 Net Income NA Average Book Value = $4 $1.50 Average Net Income = AARR = 1.5 / 4 = 0.375 = 37.5% . Calculate Press's Free Cash Flow (FCF) per year. Exhibit 2 Information on Plywood Presses Example of the Average Accounting Rate of Return The example assumes that a project's cost is depreciated over the life of the project on a straight line basis Year 1 4 Initial Project Cost Accumulated Depreciation Book Value 4 6. 8. 4 Net Income NA Average Book Value = $4 $1.50 Average Net Income = AARR = 1.5 / 4 = 0.375 = 37.5%

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Calculation of Free Cash Flow Year 0 1 2 3 4 Cash Outflow Initial Pr... View the full answer