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2 . Super Apparel wants to replace an old machine with a new one. The new machine would increase annual revenue by $ 2 0
Super Apparel wants to replace an old machine with a new one. The new machine would increase annual revenue by $ and annual operating expenses by $ The new machine would cost $ The estimated useful life of the machine is years with zero salvage value.
i Compute Accounting Rate of Return ARR of the machine using above information.
ii Should Super Apparel purchase the machine if management wants an Accounting Rate of Return of on all capital investments?
Hint: Use Average Income or Profit after deducting tax, depreciation, and operating expenses.
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