A company buys a machine for $60,000 that has an expected life of 9 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 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

The Answer of A company buys a machine for $60,000 that has an expected life of 9 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 each year. What is the accounting rate of return?
A) 2.85%.
B) 4.75%.
C) 6.65%.
D) 9.50%.
E) 42.75%.

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