The following relates to a proposed equipment purchase:

Cost	$	155,400
Salvage value	$	4,600
Estimated useful life		4	years
Annual net cash flows	$	46,700
Depreciation method	Straight-line

The annual average investment amount used to calculate the accounting rate of return is:

Multiple Choice

• $77,700

• $75,400

• $38,850

• $80,000

• $54,350

  Butler Corporation is considering the purchase of new equipment costing $33,000. The projected annual after-tax net income from the equipment is $1,300, after deducting $11,000 for depreciation. The revenue is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value. Butler requires a 11% return on its investments. The present value of an annuity of $1 for different periods follows:

  Periods	11%
  1	0.9009
  2	1.7125
  3	2.4437
  4	3.1024

  What is the net present value of the machine?

  Multiple Choice

• $3,900.

• $33,000.

• $30,058.

• $(2,942).

• $26,881.