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Accounting Rate of Return Each of the following scenarios is independent. Assume that all cash flows are after-tax cash flows. a. Cobre Company is considering the purchase of new equipment that will speed up the process for extracting copper. The equipment will cost $3,800,000 and have a life of 5 years with no expected salvage value. The expected cash flows associated with the project are as follows: \begin{tabular}{ccc} Year & Cash Revenues & Cash Expenses \\ \hline 1 & $6,000,000 & $4,800,000 \\ 2 & 6,000,000 & 4,800,000 \\ 3 & 6,000,000 & 4,800,000 \\ 4 & 6,000,000 & 4,800,000 \\ 5 & 6,000,000 & 4,800,000 \end{tabular} b. Emily Hansen is considering investing in one of the following two projects. Either project will require an investment of $75,000, The expected cash revenues minus cash expenses for the two projects follow. Assume each project is depreciable. \begin{tabular}{crr} Year & Project A & Project B \\ \hline 1 & $22,500 & $22,500 \\ 2 & 30,000 & 30,000 \\ 3 & 45,000 & 45,000 \\ 4 & 75,000 & 22,500 \\ 5 & 75,000 & 22,500 \end{tabular} c. Suppose that a project has an ARR of 30% (based on initial investment) and that the average net income of the project is $120,000. d. Suppose that a project has an ARR of 50% and that the investment is $225,000. Pequirted x x=

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