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| Teaching Since: | Apr 2017 |
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MBA, Ph.D in Management
Harvard university
Feb-1997 - Aug-2003
Professor
Strayer University
Jan-2007 - Present
7)
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Gomez Corporation is considering two alternative investment proposals with the following data:
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Investment: Proposal X - $850,000; Proposal Y - $468,000
Useful Life: Proposal X - 8 years; Proposal Y - 8 years
Estimated Annual Net Cash Inflows for 8 years: Proposal X - $125,000; Proposal Y - $78,000
Residual Value: Proposal X - $40,000; Proposal Y - $---
Depreciation Method: Proposal X - Straight-line; Proposal Y - Straight-line
Required Rate of Return: Proposal X - 14%; Proposal Y - 10%
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What is the accounting rate of return for Proposal Y?
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A) 29.17%
B) 5.24%
C) 4.17%
D) 16.67%
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