ACC-350 Quiz 6 Question and answers verified to pass 2025

ACC-350 Quiz 6 Question and answers
verified to pass 2025
Which of the following is a capital budgeting method used to screen potential
investments? - correct answer ✔accounting rate of return


Paramount Carpets is considering purchasing new equipment costing
$736,000. The company's management has estimated that the equipment will
generate cash flows as follows:
Year 1:$218,000
Year 2: $218,000
Year 3: $260,000
Year 4: $260,000
Year 5: $168,000
Considering the residual value is zero, calculate the payback period. (Round
your answer to two decimal places.) - correct answer ✔3.15 years


A company is evaluating three possible investments. Each uses the straight-
line method of depreciation. The following information is provided by the
company:


Investment
A: $210,000
B: $54,000
C: $210,000
Residual value
A: 0
B: 30,000

, C: 28,000
Net cash flows:
Year 1
A: 70,000
B: 34,000
C: 82,000
Year 2
A: 70,000
B: 25,000
C: 52,000
Year 3
A: 70,000
B: 21,000
C: 62,000
Year 4
A: 70,000
B: 18,000
C: 22,000
Year 5
A: 70,000
B: 0
C: 0
What is the accounting rate of return for Project C? (Round your answer to
two decimal places.) - correct answer ✔7.56%


Both the payback and the accounting rate of return methods focus on cash
flows that an asset generates. - correct answer ✔false