Carmino Company is considering an investment in equipment that will generate an after-tax income of $6,000 for each year of its four-year life.The asset has no salvage value.The firm is in the 40% tax bracket.The book values of the investment at the beginning of each year are as follows:
This asset's book (accounting)rate of return on average investment,which is defined as a simple average of the average book value for each of the four years.The final answer should be rounded to the nearest whole %.

Question

Carmino Company is considering an investment in equipment that will generate an after-tax income of $6,000 for each year of its four-year life.The asset has no salvage value.The firm is in the 40% tax bracket.The book values of the investment at the beginning of each year are as follows: 
This asset's book (accounting)rate of return on average investment,which is defined as a simple average of the average book value for each of the four years.The final answer should be rounded to the nearest whole %.

Quizplus · Accepted Answer

The Answer of Carmino Company is considering an investment in equipment that will generate an after-tax income of $6,000 for each year of its four-year life.The asset has no salvage value.The firm is in the 40% tax bracket.The book values of the investment at the beginning of each year are as follows: 
This asset's book (accounting)rate of return on average investment,which is defined as a simple average of the average book value for each of the four years.The final answer should be rounded to the nearest whole %.

Carmino Company Is Considering an Investment in Equipment That Will