Ennis Ltd is considering the purchase of a machine to produce a new product. The machine will cost the business 450,000 and has an expected life of five years. Annual operating profits from the machine are expected to be as follows: Operating profits Year 1 55,000 Year 2 90,000 68,000 Year 3 Year 4 36,000 Year 5 26,000 The new machine will be depreciated using the straight-line method and the estimated disposal value at the end of its useful life is 70,000. The business has a target accounting rate of return of 25% for new investment projects. 1. Calculate the accounting rate of return for the new machine. 2. Should the machine be purchased? The accounting rate of return for the new machine is %. (Round your answer to the nearest per cent.) The accounting rate of return is the required accounting rate of return for new projects and so the machine purchased. above below The accounting rate of return for the new machine is %. (Round your answer to the nearest per cent.) The accounting rate of return is the required accounting rate of return for new projects and so the machine purchased. should be should not be