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Question#$4$

A manufacturing company purchased a new machine for $$150,000.$ The

$13$ points

machine will last ten years and will be depreciated using the straight$-$line

method. The estimated salvage value of the machine is zero and should

generate a yearly cash inflow of $$39,000.$

Requirement: What is the accounting$/$average rate of return? $($Ignoring

taxes$)$

A manufacturing company purchased a new machine for $$150,000.$ The

machine will last ten years and will be depreciated using the straight$-$line

method. The estimated salvage value of the machine is zero and should

generate a yearly cash inflow of $$39,000.$

Requirement: What is the accounting$/$average rate of return? $($Ignoring

taxes$)$

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$12p$