The production department of Kerch Enterprises is proposing the purchase of an automaticinsertion machine. It has identified three machines and has asked the accountant to analyze themto determine which one has the best accounting rate of return on average investment.Machine AEstimated annual accounting income$45,500Average investment$350,000Machine BMachine C$67,500$72,800$450,000$260,000Which one has the best accounting rate of return on average investment (AKA average rate ofreturn).A. Machine AC. Machine CB. Machine BD. Machines B and C have the same preferred payback period.

To determine which machine has the best accounting rate of return on average investment, we need to…

Answered: The production department of Kerch…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 3E

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