Jensen Manufacturing Ltd.is considering buying a laser machine which costs $250,000.It requires working capital of $25,000 which will be returned at the end of the project.Annual cash savings are anticipated to be $103,000 for five years.The salvage value at the end of five years is expected to be nil.The company uses straight-line depreciation.Required:
Determine the accrual accounting rate of return of the investment.

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The Answer of Jensen Manufacturing Ltd.is considering buying a laser machine which costs $250,000.It requires working capital of $25,000 which will be returned at the end of the project.Annual cash savings are anticipated to be $103,000 for five years.The salvage value at the end of five years is expected to be nil.The company uses straight-line depreciation.Required:
Determine the accrual accounting rate of return of the investment.