The table below shows the profit after tax and the book value of investment for three...

 

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The table below shows the profit after tax and the book value of investment for three projects A, B, and C Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Project A 400,000 450,000 500,000 450,000 Project B Project C 300,000 250,000 450,000 300,000 500,000 400,000 550,000 500,000 Project Project A B 1,500,000 1,200,000 1,000,000 1,350,000 1,080,000 900,000 1,215,000 972,000 810,000 874,800 729,000 787,320 500,000 1,093,500 300,000 250,000 Project Required: Calculate the Accounting Rate of Return (ARR) of the three projects and recommend the best option based on your calculation. 656,100 590,000 The table below shows the profit after tax and the book value of investment for three projects A, B, and C Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Project A 400,000 450,000 500,000 450,000 Project B Project C 300,000 250,000 450,000 300,000 500,000 400,000 550,000 500,000 Project Project A B 1,500,000 1,200,000 1,000,000 1,350,000 1,080,000 900,000 1,215,000 972,000 810,000 874,800 729,000 787,320 500,000 1,093,500 300,000 250,000 Project Required: Calculate the Accounting Rate of Return (ARR) of the three projects and recommend the best option based on your calculation. 656,100 590,000

Answer rating: 100% (QA)

Project A ARR Profit After Tax Book Value of Investment x 100 Year 1 400000 1500000 x 100 2667 Year ... View the full answer