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    Book rate of return on the net initial investment

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    Harris Corporation provides the following data on a proposed capital project:

    Initial investment $240,000
    Expected useful life 4 years
    Increase in annual net cash inflow (before taxes) $62,000
    Required rate of return 12%
    Income tax rate 25%

    Harris uses straight-line depreciation method with no salvage value.

    Required: compute for this project:
    a. NPV.
    b. IRR (to the nearest tenth of a percent)
    c. Payback period.
    d. Book rate of return on the net initial investment.

    © BrainMass Inc. brainmass.com June 3, 2020, 6:58 pm ad1c9bdddf
    https://brainmass.com/business/capital-budgeting/book-rate-of-return-on-the-net-initial-investment-81499

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    Harris Corporation provides the following data on a proposed capital project:

    Initial investment $240,000
    Expected useful ...

    Solution Summary

    This provides the steps to calculate the Book rate of return on the net initial investment

    $2.19

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