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1b) Lana Ltd would like to buy a machine costing 50,000 and with a disposal value of 10,000. The machine is expected to last 5

1b) Lana Ltd would like to buy a machine costing 50,000 and with a disposal value of 10,000. The machine is expected to last 5 years and will bring into the company a total of 160,000 in Net Cash Flows.

Complete the following table to calculate the Accounting Rate of Return (ARR) for this machine.

Total Cashflows

Total Depreciation

Total Profit

Average annual profit

Average investment

ARR %

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