Investment Appraisal using ARR Technique

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Questions and Answers

What is the investment outlay for Proposal II?

  • RO 4,000
  • RO 50,000
  • RO 8,000
  • RO 200,000 (correct)

What is the salvage value at the end of the project for Proposal II?

  • RO 8,000
  • RO 27,000
  • RO 11,000 (correct)
  • RO 4,000

Based on the ARR technique, which proposal should be accepted?

  • Proposal II
  • Neither Proposal
  • Proposal I (correct)
  • Both proposals

What is the average accounting return (ARR) for the Bluerock Group's high-tech project?

<p>18.75% (C)</p> Signup and view all the answers

What is the total pre-tax income generated by the Bluerock Group's project over the 3 years?

<p>$6,500 (B)</p> Signup and view all the answers

What is the total depreciation expense over the 3 years for the Bluerock Group's project?

<p>$7,500 (A)</p> Signup and view all the answers

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