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A firm considers to purchase a machine costing N$ 4,500000. It is estimated that the annual savings of N$ 500000 will result from the machines

A firm considers to purchase a machine costing N$ 4,500000. It is estimated that the annual savings of N$ 500000 will result from the machines installation, that of the life of the machine will be ten years, and it's residual value will be N$ 100000. Assuming the required rate of return to be 15%, Calculate Accounting Rate of Return (ARR). What action would you recommend? (5 Marks).

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