Question
A company plans to buy a machine costing $467,000. It has a residual value of $27,900 and an expected useful life of 20 years. The
A company plans to buy a machine costing $467,000. It has a residual value of $27,900 and an expected useful life of 20 years. The firm's management estimates total income generated from the machine to be $281,000. Compute the average rate of return of the machine.
a. 4%
b. 5%
c. 3%
d. 8%
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Fundamentals of Investments Valuation and Management
Authors: Bradford Jordan, Thomas Miller
7th edition
978-0078096785, 78096782, 978-0077861636, 77861639, 978-0078115660
