alleryStart learning →A machine costs Rs 80,000 and has a scrap value of Rs 20,000. Average investment?
ARs 40,000
BRs 50,000
CRs 60,000
DRs 80,000
Answer & Solution
Correct answer: B. Rs 50,000
Average investment is (80,000 + 20,000) / 2 = Rs 50,000.
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Related questions
Which measures do economists prefer over payback for return?Rs 9,00,000 is invested and net cash flow is Rs 1,80,000 a year. Payback?A: profit Rs 40,000 on average investment Rs 2,00,000. B: Rs 54,000 on Rs 3,60,000. HigherCost Rs 12,00,000 and scrap Rs 2,00,000. Average investment under ARR?Cost Rs 3,00,000, scrap Rs 60,000, 4 years, total profit Rs 1,44,000. ARR?Which goal underlies capital budgeting in corporate finance?Capital budgeting mainly concerns which type of spending?Companies create value when their return on capital is above what?