Answered

Join IDNLearn.com and become part of a knowledge-sharing community that thrives on curiosity. Discover detailed answers to your questions with our extensive database of expert knowledge.

A company is planning to purchase a machine that will cost $ 28,800 with a six - year life and no salvage value . The company uses straight deprecation The company expects to sell the machine's output of 3.000 units evenly throughout each year A projected income statement for each year of the asset's life appears below . What is the accounting rate of return for this machine

Sagot :

Answer:

the accounting rate of return is 89.44%

Explanation:

The computation of the accounting rate of return is shown below:

accounting rate of return is

= net income ÷ average investment

 = $12,880 ÷ ($28,800 ÷ 2)

= 89.44%

Hence, the accounting rate of return is 89.44%

The same is to be considered and relevant

View image Andromache
Thank you for joining our conversation. Don't hesitate to return anytime to find answers to your questions. Let's continue sharing knowledge and experiences! IDNLearn.com has the solutions to your questions. Thanks for stopping by, and see you next time for more reliable information.