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A company Is planning to purchase a machine that will cost $25,800, have a six-year life, and be depreclated over a slx-year perlod with no
A company Is planning to purchase a machine that will cost $25,800, have a six-year life, and be depreclated over a slx-year perlod with no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected Income statement for each year of the asset's life appears below. What Is the accounting rate of return for this machine? Sales 92,000 Costs: Manufacturing Depreciation on machine $52,200 4,300 Selling and administrative expenses 32,000 (88,500) Income before taxes 3,500 Income tax (30%) (1,05e) Net income 2,450 Multiple Cholce 50.00 %. 18.99% 33.33%. AR080
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