Jensen Manufacturing is considering buying a laser machine which costs $250,000. It requires working capital of $25,000. 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.
Required:
Compute the accrual accounting rate of return based on initial investment.

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The Answer of Jensen Manufacturing is considering buying a laser machine which costs $250,000. It requires working capital of $25,000. 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.
Required:
Compute the accrual accounting rate of return based on initial investment.

Jensen Manufacturing Is Considering Buying a Laser Machine Which Costs