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Snowcap Industries may need to purchase a new snow scraper machine before the winter season for $275,000. The managerial accountant reported that the snow scraper
Snowcap Industries may need to purchase a new snow scraper machine before the winter season for $275,000. The managerial accountant reported that the snow scraper machine has a useful life of 5 years and a residual value of $75,000. The annual depreciation expense of the machine is computed using the straight-line depreciation expense method. The net cash inflows the managerial accountant expects from the investment include: Sandcorp Industries Snow Scraper Report Year 1 2 3 4 5 Total cash inflow: Net Cash Inflows $150,000 $160,000 $180,000 $140,000 $130,000 $760,000 What is the accounting rate of return on the snow scraper machine? ANSWER O 14.55% 40.73% 35.27% 55.27% I DON'T KNOW YET
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