The asset section of the January 1, 20X7 balance sheet of Murphy Company includes a machine, which was acquired on January 1, 20X1. The machine's original cost was $1,000,000, and the estimated life was determined to be 10 years. The estimated residual value was zero, and the straight-line method of depreciation was chosen.
-If operating income AFTER amortization is $160,000, the rate of return on average net book value for 19X1 is
A) 6.3 percent.
B) 32.0 percent.
C) 16.8 percent.
D) 16.0 percent.

Question

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The Answer of The asset section of the January 1, 20X7 balance sheet of Murphy Company includes a machine, which was acquired on January 1, 20X1. The machine's original cost was $1,000,000, and the estimated life was determined to be 10 years. The estimated residual value was zero, and the straight-line method of depreciation was chosen.
-If operating income AFTER amortization is $160,000, the rate of return on average net book value for 19X1 is
A) 6.3 percent.
B) 32.0 percent.
C) 16.8 percent.
D) 16.0 percent.

The Asset Section of the January 1, 20X7 Balance Sheet