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A company is planning to purchase a machine that will cost $25,800 with a six-year life and no salvage value. The company uses straight-line depreciation.
A company is planning to purchase a machine that will cost $25,800 with a six-year life and no salvage value. The company uses straight-line depreciation. 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 assets life appears below. What is the accounting rate of return for this machine? $ 92,000 Sales Costa: Manufacturing Depreciation on machine Selling and administrative expenses Income before taxes Income tax (305) Net income $52,200 4,300 32,000 (88,500) $ 3,500 (1,050) $ 2,450 Multiple Choice 4,30 33 33 500DN
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