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Given the following information, Calculate the accounting rate of return for both machines and the payback period for both Machines. Which one should you invest
Given the following information, Calculate the accounting rate of return for both machines and the payback period for both Machines. Which one should you invest in? Machine 1 Purchase Cost: $20,000 Salvage Value: $1000 Estimated Life: 5 years Annual Savings: $5,500 Annual Operating Costs: $775 Annual Depreciation: $3,800 30% income tax Machine 2 Purchase costs: $22,000 Salvage Value: $2,000 Estimated Life: 5 years Annual Savings: $5,500 Annual Operating Costs: $650 Annual Depreciations: $4000 30% income tax
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