A company buys a machine for $60,000 that has an expected life of nine years and no salvage value.The company anticipates a yearly net income of $2,850 after taxes of 30%,with the cash flows to be received evenly throughout of each year.What is the accounting rate of return?
A) 2.85%
B) 4.75%
C) 6.65%
D) 9.50%
E) 42.75%

Question

Quizplus · Accepted Answer

Accounting rate of return = $2,850/ [(60,000 + 0)/2] = 9.5%

A Company Buys a Machine for $60,000 That Has an Expected