Math Problem Statement
A rural poultry farm cost 5,000,000 to set up and as a stable salvage value of 1,000,000. Its stream of income before depreciation and taxes during the first 5 years is: 1,000,000, 1,200,000, 1,400,000, 1,600,000, 2,000,000 . If depreciation is on straight line basis and take rate 50%. Calculate the accounting rate of return
Solution
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Math Problem Analysis
Mathematical Concepts
Accounting
Financial Analysis
Depreciation
Formulas
Annual Depreciation = (Initial Cost - Salvage Value) / Useful Life
ARR = (Average Net Income / Average Investment) * 100
Theorems
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Suitable Grade Level
Higher Education
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