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The following data concerns a proposed equipment purchase: Cost $136,400 Salvage value $3,600 Estimated useful life 4 years Annual net cash flows $45,700 Depreciation method
The following data concerns a proposed equipment purchase:
Cost | $136,400 |
Salvage value | $3,600 |
Estimated useful life | 4 years |
Annual net cash flows | $45,700 |
Depreciation method | Straight-line |
The annual average investment amount used to calculate the accounting rate of return is:
a. $68,200
b. $66,400
c. $34,100
d. $70,000
e. $45,350
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