Answer:
3,000 units of alpha
76,000 units of beta
Explanation:
the question is incomplete, so I looked for a similar question:
"Cane Company manufactures two products called Alpha and Beta that sell for $215 and $160, respectively. Each product uses only one type of raw material that costs $7 per pound. The company has the capacity to annually produce 125,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta $ 21 Direct materials $42 Direct labor 35 28 Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses 23 21 31 34 28 24 Common fixed expenses 31 26 $190 $154 Total cost per unit The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars."
contribution margin per unit:
Alpha = $215 - $128 = $87
Beta = 160 - $94 = $66
pounds of raw materials per unit:
Alpha = $42 / $7 = 6
Beta = $21 / $7 = 3
since the production constraint is the number of pounds of raw materials available, the contribution margin per pound:
Alpha = $87 / 6 = $14.50
Beta = $66 / 3 = $22
so the company should try to produce the largest amount of betas as possible = 76,000 x 3 pounds = 228,000 pounds
remaining production of alphas = (246,000 - 228,000) / 6 = 3,000 units
Olsen Company paid or collected during 2014 the following items:
Insurance premiums paid $ 25,800
Interest collected 62,800
Salaries paid 260,400
The following balances have been excerpted from Olsen's balance sheets:
Dec 31, 2014 Dec 31, 2013
Prepaid insurance $ 2,400 $ 3,000
Interest receivable 7,400 5,800
Salaries and wages payable24,600 21,200
The insurance expense on the income statement for 2014 was
A.
$26,400.
B.
$20,400.
C.
$25,200.
D.
$31,200.
Answer:
A. $26,400
Explanation:
Prepaid insurance beginning balance $3,000
Add: Insurance paid during year $25,800
$28,800
Less: Prepaid insurance Ending balance $2,400
Insurance expense $26,400
Use the following returns for X and Y. Returns Year X Y 1 21.6 % 25.8 % 2 – 16.6 – 3.6 3 9.6 27.8 4 19.2 – 14.2 5 4.6 31.8 a. Calculate the average returns for X and Y
Answer:
For Average X = 7.68%
For Average Y = 13.52%
Explanation:
The computation of average return for X and Y is shown below:-
Average return = sum of return ÷ n
Year X Y
1 21.60% 25.80%
2 -16.60% -3.60%
3 9.60% 27.80%
4 19.20% -14.20%
5 4.60% 31.80%
Total 38.40% 67.60%
Avg X = 38.40% ÷ 5
= 7.68%
Avg Y = 67.60% ÷ 5
= 13.52%
Suppose an initial investment of $80 will return $30/year for three years (assume the $30 is received each year at the end of the year).
At a discount rate of 25%, this investment ________ profitable.
Answer:
not profitable
Explanation:
The computation of investment profitable is shown below:-
The present value of the return is
= 30 ÷ 1.25 + 30 ÷ 1.25^2 + 30 ÷ 1.25^3
= 24 + 19.2 + 15.36
= 58.56 < 80
Therefore, the present value for the return is lower than the initial investment so, the investment is not profitable and hence the same is not to be considered
The S&P 500 index delivered a return of 10%, 15%, 15%, and −25% over four successive years. What is the arithmetic average annual return per year?
Answer:arithmetic average annual return per year= 3.75%
Explanation:
Year 1 = 10%
Year 2= 15%
Year 3 = 15%
Year 4 = -25%
total return = 15%
Arithmetic average annual return per year =(Return of year1 + return of year 2 + return of year 3+ return of year 4 )/4 = 15% /4 = 3.75%
In a lean system, the work in process and raw materials inventory accounts are combined.
A. True
B. False
Answer: True
Explanation:
Lean is simply defined as management practices that are used by companies or organizations in order to improve the effectiveness and the efficiency during production by eliminating waste.
It should be noted that in a lean system, the work in process and raw materials inventory accounts are combined.
Andrea Apple opened Apple Photography, Inc. on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books:
1. Andrea invested $13,600 cash in the business in exchange for common stock.
2. Andrea contributed $21,000 of photography equipment to the business.
3. The company paid $2,200 cash for an Insurance policy covering the next 24 months.
4. The company received $5,800 cash for services provided during January.
5. The company purchased $6,300 of office equipment on credit.
6. The company provided $2,850 of services to customers on account.
7. The company paid cash of $1,600 for monthly rent.
8. The company paid $3,200 on the office equipment purchased in transaction #5 above.
9. The company paid $285 cash for January utilities.
Required:
Based on this information, the balance in the cash account at the end of January would be:_____.
a) $15,450.
b) $12,115.
c) $13,500.
Answer:
Apple Photography, Inc.
Based on this information, the balance in the cash account at the end of January would be:_____.
b) $12,115.
Explanation:
a) Cash Account
Common Stock $13,600
Insurance (2,200)
Service Revenue 5,800)
Rent (1,600)
Office equipment (3,200)
Utilities (285)
Balance $12,115
b) Apple Photography, Inc had a balance in the cash account at the end of January of $12,115 which was the difference between the cash inflows and cash outflows during the month. The inflows represented cash received by Apple Photography from the owners and customers and the cash paid for running the business.
A two-year bond with par value $1,000 making annual coupon payments of $100 is priced at $1,000. a. What is the yield to maturity of the bond?
Answer: 10%
Explanation:
When the price of a bond is at par, it means that the coupon rate and the Yield to Maturity are the same.
The Coupon rate is the interest rate that the Issuer of the bond pays the bond holders as a percentage of Par.
The Coupon payment here is $100 and the rate is;
= 100/1,000
= 10%
Coupon Rate = 10% = Yield to Maturity
Bartelt Inc., which produces a single product, has provided the following data for its most recent month of operations: Number of units produced 5,900 Variable costs per unit: Direct materials $ 66 Direct labor $ 60 Variable manufacturing overhead $ 7 Variable selling and administrative expenses $ 15 Fixed costs: Fixed manufacturing overhead $ 200,600 Fixed selling and administrative expenses $ 454,300 There were no beginning or ending inventories. The absorption costing unit product cost was
Answer:
The cost per unit under absorption costing is $167
Explanation:
Under absorption costing approach, the direct material, direct labor, Variable manufacturing overhead and fixed manufacturing overhead are considered as product cost. All other cost are considered as period cost
Thus, the cost per unit under the absorption costing is
Particulars Amount
Direct material $66
Direct labor $60
Variable manufacturing overhead $7
Fixed manufacturing overhead $34
$ 200,600 / 5,900
Cost per units $167
Thus, the cost per unit under absorption costing is $167
An oral auction has bidders willing to pay $4, $6, $9, $12, $13, and $15 for an item. The winning bidder will pay a little more than which of the following amounts?
a. $4.25
b. $13.25
c. $14.00
d. $15.00
Answer: $13.25
Explanation:
From the question, we are informed that an oral auction has bidders willing to pay $4, $6, $9, $12, $13, and $15 for an item.
Based on the above scenario, the winning bidder will pay a little more than $13 or $13.25. This is because the bidder with the highest pay is willing to pay $15 but since the next person is willing to pay $13, that means the next bidder will price it at an amount that is a little bit above $13 which is $13.25.
On a given day, the discount rate is 3.65%, the prime rate is 3.55%, the LIBOR is 3.30%, the federal funds rate is 3.25%, and the federal funds target rate is 3.20%
On the same day, Bank XYZ's reserve balance held at the Federal Reserve is lower than the reserve requirement, and Bank XYZ needs to borrow funds from those member institutions of the Federal Reserve who have excess funds in their reserve. Let x be the rate at which Bank XYZ borrows from these excess funds.
Determine x.
(A) 3.20%
(B) 3.25%
(C) 3.30%
(D) 3.55%
(E) 3.65%
Answer: (B) 3.25%
Explanation:
Commercial banks are meant to keep a portion of their total deposits with the Fed. This is called the Reserve requirement. Every day, these commercial banks have to meet this reserve requirement but sometimes they cannot.
When this happens they can balance their account by borrowing from other banks or member institutions of the Federal Reserve who have an excess balance on their reserve. The rate at which they can borrow from these other institutions is called the Federal Funds Rate which according to the question is 3.25%. That is therefore x.
If there were 50000 pounds of raw materials on hand on January 1, 140000 pounds are desired for inventory at January 31, and 530000 pounds are required for January production, how many pounds of raw materials should be purchased in January?
Answer:
Purchases= 620,000 pounds
Explanation:
Giving the following information:
Beginning inventory= 50,000 pounds
Desired ending inventory= 140,000 pounds
Production= 530,000 pounds
To calculate the purchase required, we need to use the following formula:
Purchases= production + desired ending inventory - beginning inventory
Purchases= 530,000 + 140,000 - 50,000
Purchases= 620,000 pounds
Which of the following types of businesses might have an operating cycle longer than one year?
A. Ski resort.
B. Clothing retailer.
C. Florist.
D. Wheat farmer.
E. Commercial airplane manufacturer.
Answer: E. Commercial airplane manufacturer.
Explanation:
An operating cycle refers to the amount of time it will take a company to produce or purchase goods, sell them and receive cash for the goods.
A Commercial airplane manufacturer might have an operating cycle longer than a year as it takes time to manufacture planes and then to sell them due to their high prices and even at that with the huge amounts involved, the payments might not come all at once.
Wendell’s Donut Shoppe is investigating the purchase of a new $40,000 donut-making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of $5,200 per year. In addition, the new machine would allow the company to produce one new style of donut, resulting in the sale of 2,000 dozen more donuts each year. The company realizes a contribution margin of $2.40 per dozen donuts sold. The new machine would have a six-year useful life. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. What would be the total annual cash inflows associated with the new machine for capital budgeting purposes? 2. What discount factor should be used to compute the new machine’s internal rate of return? (Round your answers to 3 decimal places.) 3. What is the new machine’s internal rate of return? (Round your final answer to the nearest whole percentage.) 4. In addition to the data given previously, assume that the machine will have a $10,515 salvage value at the end of six years. Under these conditions, what is the internal rate of return? (Hint: You may find it helpful to use the net present value approach; find the discount rate that will cause the net present value to be closest to zero.) (
Answer:
initial outlay $40,000
savings per year = $5,200
additional contribution margin = 2,000 x $2.40 = $4,800
machines useful life = 6 years
1) total annual cash flows (assuming no residual value)
Year₀ = -$40,000
Year₁ = $5,200 + $4,800 = $10,000
Year₂ = $10,000
Year₃ = $10,000
Year₄ = $10,000
Year₅ = $10,000
Year₆ = $10,000
2) to determine IRR we can use a financial calculator or the present value of an annuity formula:
PV = annual payment x annuity factor
PV = $40,000
annual payment = $10,000
annuity factor = $40,000 / $10,000 = 4
3) using present value of an annuity table:
we have 6 periods, and we must look for an interest rate that results in an annuity factor of 4 = 13% (the exact annuity factor is 3.998)
using a financial calculator, the IRR = 12.98%, which we can round to 13%
4) the cash flows will be:
Year₀ = -$40,000
Year₁ = $10,000
Year₂ = $10,000
Year₃ = $10,000
Year₄ = $10,000
Year₅ = $10,000
Year₆ = $20,515
We cannot use the annuity formula now because our annuities are not equal. Using a financial calculator, IRR = 16.99%
what is the great economic problem
Answer:
Explanation:
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The great economic problem is how to arrange our limited resources to satisfy as many of our wants as possible. Resources are not equally valuable in all uses, so we must choose where to allocate our resources in order to get the most value out of those resources
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Perch Co. acquired 80% of the common stock of Float Corp for $1,600,000. The fair value of Float's net assets was $1,850,000, and the book value was $1,500,000. The non-controlling interest shares of Float Corp are not actively traded.
1) What is the total amount of goodwill recognized at the date of acquisition?
a) $150,000
b) $250,000
c) $0
d) $120,000
e) $170,000
2. What amount of goodwill should be attributed to the non-controlling interest at the date of acquisition?
a) $0
b) $20,000
c) $30,000
d) $100,000
e) $120,000
Answer:
1. a) $150,000
2. c) $30,000
Explanation:
1) Goodwill of Controlling Interest = Purchase price - (FMV of Net Asset * % ownership)
= $1,600,000 - ( $1,850,000 * 80%)
= $120,000
Total amount of goodwill recognized at the date of acquisition = Goodwill of Controlling Interest / %ownership
= $120,000 / 80%
= $150,000
2. Amount of goodwill to be attributed to the non-controlling interest at the date of acquisition = Total amount of goodwill recognized at the date of acquisition - Goodwill of Controlling Interest
= $150,000 - $120,000
= $30,000
Marketing communications allow companies to link their brands to other people, places, events, brands, experiences, feelings, and things.
A. True
B. False
Answer:
True.
Explanation:
True, marketing communication is an advertisement that attracts people. It is the process to show the quality of commodity and how it will be suitable to the consumer. Companies use different types of tactics to make customer relations and to attract new customers. moreover, these marketing communications use the sentiments of the people and try to link that sentiment or feelings with the product. Therefore, following this way, they create their product’s link with people.
On January 1, 2019, Langdon & Co. issues bonds with a face value of $50,000 for $51,000. Each $1,000 bond carries 10 warrants, and each warrant allows the holder to acquire one share of $1 par common stock for $40 per share. Immediately after the issuance, the bonds are quoted at 99 ex rights and the warrants are quoted at $5 each. Calculate the value to be assigned to the bonds and to the warrants.
Answer:
$48,548 to be assigned to the bonds, and $2,452 to the warrants
Explanation:
the value that should be assigned to the bonds is:
= [market value of bonds / (market value of bonds without warrants + market value of warrants)] x price at issuance
market value of bonds = 99 ex rights x 1,000 = $990
market value of warrants = $5 x 10 = $50
issuance price = $51,000
= [$990 / ($990 + $50)] x $51,000 = ($990 / $1,040) x $51,000 = 0.951923 x $51,000 = $48,548.08 ≈ $48,548
the value assigned to the warrants = $51,000 - $48,548 = $2,452
During 2016, Moore Corp. had the following two classes of stock issued and outstanding for the entire year: 100,000 shares of common stock, $1 par. 1,000 shares of 4% preferred stock, $100 par, convertible share for share into common stock. Moore's 2016 net income was $900,000, and its income tax rate for the year was 30%. In the computation of diluted earnings per share for 2016, the amount to be used in the numerator is
Answer:
the amount to be used in the numerator is $900,000.
Explanation:
Earnings Per Share = Earnings Attributable to Holders of Common Shares ÷ Weighted Average Number of Common Shares Outstanding.
Diluted Earnings per Share takes into account potential voting rights.
The Preference dividend is not deducted from Net Income as it carries a potential voting right.
Periodic review systems are best suited for the C category of items under the ABC classification scheme.
a. True
b. False
Answer:
a. True
Explanation:
ABC classification scheme refers to item analysis that is based upon the principle that there are many less critical items and few critical items by dividing on-hand inventory into three classes which is generally based upon annual dollar volume as follows:
"A items" have very tight control and accurate records
"B items" does not have a tight control and good records
"C items" have minimal records, periodic review, and and characterized by simple controls.
From the above explanation, it is therefore true that periodic review systems are best suited for the C category of items under the ABC classification scheme.
Do personal profits earned directly as a result of one partner's connection with the partnership belong to the firm:_________
Answer:
No
Explanation: The key word is it was earned as result of the connection to the firm so it is split between the partners
"A customer invests $500,000 in a limited partnership for a 20% interest. The partnership takes a loan for $10,000,000, for which each of the partners has signed and is personally liable. The partnership liquidates and $8,000,000 of the debt is paid off from the proceeds. The limited partner's remaining liability is:"
Answer:
The limited partner's remaining liability is $400,000
Explanation:
The remaining liability after the debt payment of $8,000,000 is $2,000,000 ($10,000,000-$8,000,000)
The limited partner has a 20% interest in the business that entitles the partner to 20% share of profit or liabilities.
The limited partner's share of the remaining liability is 20% of the liability balance i.e $400,000($2,000,000*20%)
g Our company pays an average wage of $12 per hour to employees for printing and copying jobs, and allocates $18 of overhead for each employee hour worked. Materials are assigned to each job according to actual cost. If Job M-47 used $350 of materials and took 20 hours of labor to complete, what is the total cost that should be assigned to the job
Answer:
Total cost= $950
Explanation:
Giving the following information:
Direct labor= $12 per hour
Manufacturing overhead= $18 for each employee hour worked.
Job M-47:
used $350 of materials and took 20 hours of labor to complete
We need to calculate the total cost of Job M-47:
Total cost= direct material + direct labor + allocated overhead
Total cost= 350 + 12*20 + 18*20
Total cost= $950
When compared with selling stocks to the public, a private placement has
Answer:
this is not the answer but u can get it from here
Explanation:
Private placement offerings are securities released for sale only to accredited investors such as investment banks, pensions, or mutual funds.
In 2020, a customer buys 1 GE 10%, $1,000 par debenture, M '35, at 115. The interest payment dates are Jan 1st and Jul 1st. The bond is first callable in 2030 at 102. The yield to call on the bond is
Answer:
The yield to call on the bond is 9.37%.
Explanation:
This can be calculate using the YTC using the following equation:
YTC = (C + (CP - P) / t) / ((CP + P) / 2) .......................... (1)
Where:
YTC = YTW = yield to call or yield to worst = ?
C = Annual coupon interest payment = Bond interest rate * Bond face value = 10% * $1,000 = $100
CP = Call price of the bond = $1,000 * 102% = $1,020
P = price of the bond = $1,000 * 105 = $1,050
t = time in years remaining until the call date = 10 years
Substituting the values into equation (1), we have:
YTC = (100 + (1,020 - 1,050) / 10) / ((1,020 + 1,050) / 2)
YTC = (100 - 30 / 10) / (2,070 / 2)
YTC = (100 - 3) / 1,035
YTC = 97 / 1,035
YTC = 0.0937, or 9.37%
Therefore, the yield to call on the bond is 9.37%.
Lisa Lasher buys 400 shares of stock on margin at $21 per share. If the margin requirement is 50 percent, how much must the stock rise for her to realize a 35-percent return on her invested funds
Answer:
$3.68 per share
Explanation:
Lisa Lasher purchases 400 shares of stock on margin at the price of $21 per share
The margin requirement is 50%
= 50/100
= 0.5
The first step is to calculate the amount of money invested
= $21×400×0.5
= $4,200
The amount in which the stock must rise to inorder for Lisa to realize a 35% return on invested funds can be calculated as follows
= 35/100×4,200
= 0.35×4,200
= $1,470
$1470/400 shares
= $3.68 per share
Hence the stock must rise to $3.68 per share for Lisa to realize a 35% return on her invested funds
Consider each of the transactions below. All of the expenditures were made in cash.
1. The Edison Company spent $22,000 during the year for experimental purposes in connection with the development of a new product.
2. In April, the Marshall Company lost a patent infringement suit and paid the plaintiff $7,000.
3. In March, the Cleanway Laundromat bought equipment. Cleanway paid $16,000 down and signed a noninterest-bearing note requiring the payment of $23,000 in nine months. The cash price for this equipment was $35,000.
4. On June 1, the Jamsen Corporation installed a sprinkler system throughout the building at a cost of $38,000.
4. The Mayer Company, plaintiff, paid $22,000 in legal fees in November, in connection with a successful infringement suit on its patent.
5. The Johnson Company traded its old equipment for new equipment. The new equipment has a fair value of $13,000. The old equipment had an original cost of $12,400 and a book value of $6,000 at the time of the trade. Johnson also paid cash of $10,000 as part of the trade. The exchange has commercial substance.
Required:
Prepare journal entries to record each of the above transactions.
Answer: Please see explanation column for answers
Explanation:
1.Journal to record amount spent on experimental purposes for development of new product
Date Account Debit Credit
Research and development expense $ 22,000.00
Cash $22,000.00
2. Journal to record amount paid for legal fees for lost in infringement suit
Date Account Debit Credit
April legal fee expense $7,000.00
Cash $ 7,000.00
3. Journal to record amount and note payable for purchase of equipment
Date Account Debit Credit
March Equipment $ 35,000.00
Discount on note payable 4,000.00
Cash $ 16,000.00
Note payable $ 23,000.00
Calculation:
Discount on note payable= (23,000 +16,000)- $35,000 = $4000
4Journal to record amount paid for installation of sprinkler system
Date Account Debit Credit
June 1 Building- sprinkler system $ 38,000.00
Cash $ 38,000.00
5
Journal to record amount received by plaintiff for successful infringement
Date Account Debit Credit
patent $ 22,000.00
Cash $ 22,000.00
6.Journal to record purchase of new machine in exchange of old one
Date Account Debit Credit
new machine-fair value $ 13,000.00
lost in trade-in $ 3,000.00
Accumulated depreciation $6,400.00
old machine $ 12,400.00
Cash $ 10,000.00
Calculation:
lost in trade-in = book value of old machine + cash paid for machine - fair value of new equipment =(6000+10000-13000)
= $3000
Accumulated depreciation=original cost of old machine - book value = $12400- $6000=$6,400
Analysis of a company's financial statements: Below are simplified versions of the balance sheet and income statement for Toys by Tom, Inc. Use this information to answer the following question.All the customers of Toys by Tom, Inc. take advantage of credit offered. On average, they take ______ days to pay outstanding bills.
Answer:
The right approach will be "30".
Explanation:
Debtors
= 1000
Sales
= 12000
As we know,
⇒ [tex]Debtor \ day \ outstanding = \frac{Debtors}{Credit \ sales}\times 365[/tex]
On substituting the estimated values, we get
⇒ [tex]=\frac{1000}{12000}\times 365[/tex]
⇒ [tex]=30.41 \ i.e., \ 30[/tex]
So that the above is the appropriate answer.
A financial institution offers a "double-your-money" savings account in which you will have $2 in 4 years for every dollar you invest today. What stated annual interest rate (assuming semi-annual compounding) does this account offer?
Answer:
The stated annual interest rate offered by this account is 41.42%.
Explanation:
The stated annual interest rate, r on the saving account can be determined as follows :
Pv = - $1
n = 4 × 2= 8
pmt = $ 0
p/yr = 2
Fv = $4
r = ?
Using a financial calculator the nominal rate,r compounded semi-annual is 37.8414 %
Then use the financial calculator to convert norminal rate to annual rate as follows :
37.8414 % Shift NOM%
P/YR 2
Shift EFF% 41.4213 or 41.42%
The stockholders' equity of Company at the beginning and end of totaled and , respectively. Assets at the beginning of were . If the liabilities of Company increased by in , how much were total assets at the end of ? Use the accounting equation.
Answer: $240,000
Explanation:
The Accounting Equation holds that;
Assets = Liabilities + Capital
At the Beginning of the year;
Assets were $151,000
Capital in the form of Equity was $123,000
Liability according to the Accounting Equation would be;
151,000 = Liabilities + 123,000
Liabilities = 151,000 - 123,000
= $28,000
At the end of the year, Liabilities increased by $72,000 and equity is now $140,000.
Assets would now be;
= Liabilities + Capital
= (28,000 + 72,000 ) + 140,000
= $240,000
Top Growth Farms, a farming cooperative, is considering purchasing a tractor for $551,500. The machine has a 10-year life and an estimated salvage value of $36,000. Delivery costs and set-up charges will be $12,100 and $400, respectively. Top Growth uses straight-line depreciation. Top Growth estimates that the tractor will be used five times a week with the average charge to the individual farmers of $400. Fuel is $50 for each use of the tractor. The present value of an annuity of 1 for 10 years at 9% is 6.418. For the new tractor, compute the:
A) Calculate the payback period.
B) Calculate the net present value.
C) Calculate the accounting rate of return
Answer:
a. 6.2
b. $20,038
c. 12.73%
Explanation:
Initial investment = $551,500 + $12,100 + $400
Initial investment = $564,000
Annual cash flows = 5 * 52 * ($400 - $50)
Annual cash flows = $91,000
a. Payback period
Cash payback = Initial investment / Annual cash flows
Cash payback =564000 / 91000
Cash payback = 6.2
b. Net present value
Net present value = Present value of cash flow - Capital investment
Where Present value of cash flow = Annual cash flows * PVA(1,10%,9)
Present value of cash flow = $91000*6.418
Present value of cash flow = $584,038
Capital investment = $564000
Net present value = $584,038 - $564000
Net present value = $20,038
c. Accounting rate of return
Average Investment= ($564,000 + $36,000) / 2
Average Investment = $300,000
Annual Net Income = $91,000 - ($564,000 - $36,000) / 10
Annual Net Income = $38,200
Accounting rate of return = Annual Net Income / Average Investment
Average Investment = $38,200 / $300,000
Average Investment = 12.73%