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# Please complete all questions on workbook

Please complete all questions on workbook
Answered Same Day Jul 04, 2020

## Solution

Aarti J answered on Jul 07 2020
Cover Sheet
FNSACC501 â€“
performance information Workplace simulation
Student Details
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Question     Unit of competency     Topic     Possible Mark
1    FNSACC501/1,2,3     Accounting Rate of Return     16
2    FNSACC501/1, 2, 3     Payback     10
3    FNSACC501/1, 2, 3     Investment Appraisal     33
4    FNSACC501/1, 2, 3     Ratio Analysis     10
5    FNSACC501/1, 2, 3     Economic Order Quantity    10
6    FNSACC501/1, 2, 3     Multiple Choice     21
100
Question 1
Question 1 - Must show calculations
Potato is considering two mutually exclusive projects. Both of the projects have a life of six years.
Project Tom will cost \$250,000 and have a residual value of \$50,000. Project Je
y will cost \$180,000 and have No residual at the end of its useful life.
The Expected minimum return is 10%. The After Tax Cash Flows from each project are as follows.
Y ears     Project Tom     Project Je
y
\$     \$
1    25,000    70,000
2    20,000    50,000
3    28,000    80,000
4    45,000    25,000
5    90,000    35,000
6    60,000    40,000
a. Calculate the Accounting Rate of Return based on Average Investment for each Project?
b. Calculate the Accounting Rate of Return based on Average Investment for each Project?
Calculating the depreciation per yea
Project Tom:
Depreciation =    (250000-50000)/6
=    33333
Project Je
y
Depreciation =    180000/6
=    30000
Calcualting average income
Y ears     Project Tom     Project Je
y
1    58,333    100,000
2    53,333    80,000
3    61,333    110,000
4    78,333    55,000
5    123,333    65,000
6    93,333    70,000
Average income    78,000    80,000
Average investment    150000    90000
ARR    52.00%    88.89%
Question 2
Question 2 Must show calculations
Kate is considering the Purchase of a Machine that has a cost of \$70,000.
The...
SOLUTION.PDF