Transport Ltd is considering fitting a mounted forklift to each of its five delivery trucks. They have
Fantastic news! We've Found the answer you've been seeking!
Question:
Transport Ltd is considering fitting a mounted forklift to each of its five delivery trucks. They have decided to base their decision on the accounting rate of return and provide you with the following information:
The cost of the mounted forklifts will be €95,000 and they are expected to have a five year life with a scrap value of €5,000. The purchase of the forklifts is expected to result in a
€10,000 cash inflow in the first year and cash inflows of €40,000, €40,000, €60,000 and
€45,000 in years two to five respectively
A) Explain what risk is in the context of capital investment decisions and why it is particularly important in this context.
Related Book For
Mergers Acquisition And Other Restructuring Activities
ISBN: 9780123854858
6th Edition
Authors: Donald M. Depamphilis
Posted Date: