Calculate the profitability of the following proposal using Return on investment method Proposal I Automatic machine Cost 420000 Estimated life 6.5 years Estimated sales p.a 175000 Cost : Material 60000 Labor 22000 Variable overheads 14000 a. 16.53% b. All the options are wrong c. 3.42% d. 4.62%
Calculate the profitability of the following proposal using Return on investment method Proposal I Automatic machine Cost 420000 Estimated life 6.5 years Estimated sales p.a 175000 Cost : Material 60000 Labor 22000 Variable overheads 14000 a. 16.53% b. All the options are wrong c. 3.42% d. 4.62%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Calculate the profitability of the following proposal using Return on investment method
Proposal I
Automatic machine
Cost
420000
Estimated life
6.5 years
Estimated sales p.a
175000
Cost : Material
60000
Labor
22000
Variable overheads
14000
a.
16.53%
b.
All the options are wrong
c.
3.42%
d.
4.62%
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