Meccah, Inc., is considering investing $250,000 in a machine that will last 4 years with no residual value. The new machine will generate annual operating income of $60,000 per year for 4 years. What is the accounting rate of return?

Name: Meccah, Inc., is considering investing $250,000 in a machine that will last 4 years with no residual value. The new machine will generate annual operating income of $60,000 per year for 4 years. What is the accounting rate of return?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

$60,000/$250,000 = 24%