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Food Harvesting Corporation is considering purchasing a machine for $2,200,000. The machine is expected to generate a constant after-tax income of $90,000 per year for
Food Harvesting Corporation is considering purchasing a machine for $2,200,000. The machine is expected to generate a constant after-tax income of $90,000 per year for 12 years. The firm will use straight-line (SL) depreciation for the new machine over 10 years with no residual value.
What is the estimated accounting (book) rate of return (rounded to two decimal places) on the initial investment?
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