Question: please answer asap Suppose we are deciding whether or not to open a store in a new shopping mall. The required investment in improvements is

please answer asap

Suppose we are deciding whether or not to open a store in a new shopping mall.

The required investment in improvements is $ 500,000.

The store would have a five-year life then everything reverts to the mall owners against the value of $ 50,000.

The required investment would be 100 % depreciated over five years (Straight-line method).

The straight-line method is used for calculating the annual depreciation.

The tax rate is 25 %. ARR target 13.5 %.

The table ahead shows the projected revenues and expenses. Complete the table then answer the following questions:

$ Year 1 Year 2 Year 3 Year 4 Year 5
Revenue 300,000 360,000 340,000 300,000 280,000
Expenses 200,000 150,000 100,000 100,000 100,000
EBDT
Depreciation
EBT
Tax @ 25 %
NI

The taxes amount for the first year is

Answer 1Choose...$64,500True$360,00014.33%$60,000$100,00012.90%17.92%0Accepted$105,000$500,000$80,625False$110,000$240,000

Net Income for the fifth year is

Answer 2Choose...$64,500True$360,00014.33%$60,000$100,00012.90%17.92%0Accepted$105,000$500,000$80,625False$110,000$240,000

Using the ARR method, the project is accepted or rejected?

Answer 3Choose...$64,500True$360,00014.33%$60,000$100,00012.90%17.92%0Accepted$105,000$500,000$80,625False$110,000$240,000

The ARR method considers the time value of money (True, False)

Answer 4Choose...$64,500True$360,00014.33%$60,000$100,00012.90%17.92%0Accepted$105,000$500,000$80,625False$110,000$240,000

The Accounting Rate of Return (ARR) is

Answer 5Choose...$64,500True$360,00014.33%$60,000$100,00012.90%17.92%0Accepted$105,000$500,000$80,625False$110,000$240,000

The annual depreciation amount is

Answer 6Choose...$64,500True$360,00014.33%$60,000$100,00012.90%17.92%0Accepted$105,000$500,000$80,625False$110,000$240,000

EBT for the second year is

Answer 7Choose...$64,500True$360,00014.33%$60,000$100,00012.90%17.92%0Accepted$105,000$500,000$80,625False$110,000$240,000

EBDT for the third year is

Answer 8Choose...$64,500True$360,00014.33%$60,000$100,00012.90%17.92%0Accepted$105,000$500,000$80,625False$110,000$240,000

The ARR method uses the cashflows (True, False)

Answer 9Choose...$64,500True$360,00014.33%$60,000$100,00012.90%17.92%0Accepted$105,000$500,000$80,625False$110,000$240,000

The highest net income is

Answer 10Choose...$64,500True$360,00014.33%$60,000$100,00012.90%17.92%0Accepted$105,000$500,000$80,625False$110,000$240,000

One of the ARR problems is: the cutoff period is subjective (True, False)

Answer 11Choose...$64,500True$360,00014.33%$60,000$100,00012.90%17.92%0Accepted$105,000$500,000$80,625False$110,000$240,000

The average incremental accounting income

Answer 12Choose...$64,500True$360,00014.33%$60,000$100,00012.90%17.92%0Accepted$105,000$500,000$80,625False$110,000$240,000

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