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I purchased a water park for $1,910,000. The annual net cash inflows are $481,000 for 8 years. There is no residual value and I have to use straight...
I purchased a water park for $1,910,000. The annual net cash inflows are $481,000 for 8 years. There is no residual value and I have to use straight line depreciation. Stockholders demand annual return of 10% investments. How do I determine accounting rate of return of ARR. I think that the average annual operating income/amount invested = ARR % so average operating income =total cash flow-depreciation divided by # of years of investment...how do I figure out this out?