A machine costs $180,000 and will have an eight-year life, a $20,000 salvage value, and straight-line depreciation is used. Management estimates the machine will yield an after-tax net income of $12,500 each year. Compute the accounting rate of return for the investment.
A) 10.8%.
B) 12.5%.
C) 26.8%.
D) 22.5%.
E) 11.8%.

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The Answer of A machine costs $180,000 and will have an eight-year life, a $20,000 salvage value, and straight-line depreciation is used. Management estimates the machine will yield an after-tax net income of $12,500 each year. Compute the accounting rate of return for the investment.
A) 10.8%.
B) 12.5%.
C) 26.8%.
D) 22.5%.
E) 11.8%.

A Machine Costs $180,000 and Will Have an Eight-Year Life