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A company is considering purchasing a machine that costs $304000 and is estimated to have no salvage value at the end of its 8-year
A company is considering purchasing a machine that costs $304000 and is estimated to have no salvage value at the end of its 8-year useful life. If the machine is purchased, annual revenues are expected to be $110000 and annual operating expenses exclusive of depreciation expense are expected to be $38000. The straight-line method of depreciation would be used. If the machine is purchased, the expected annual rate of return on this machine is 22.4%. 11.2%. 23.7%. 47.4%.
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