A machine costs $600,000 and is expected to yield an after-tax net income of $23,000 each year. Management predicts this machine has a 12-year service life and a $120,000 salvage value, and it uses straight-line depreciation. Compute this machine's accounting rate of return. Choose Numerator: Annual average investment aisag 22.000 1 L Accounts receivable Annual after-tax net income Annual average investment Annual pre-tax income Average total assets Accounting Rate of Return Choose Denominator: $ = 600,000 = Accounting Rate of Return Accounting rate of return 3.83 %

A machine costs $600,000 and is expected to yield an after-tax net income of $23,000 each year. Management predicts this machine has a 12-year service life and a $120,000 salvage value, and it uses straight-line depreciation. Compute this machine's accounting rate of return. Choose Numerator: Annual average investment aisag 22.000 1 L Accounts receivable Annual after-tax net income Annual average investment Annual pre-tax income Average total assets Accounting Rate of Return Choose Denominator: $ = 600,000 = Accounting Rate of Return Accounting rate of return 3.83 %

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 5P

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