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Your firm is considering purchasing a machine with the following annual, end-of-year, book investment accounts. Purchase Date Year 1 Year 2 Year 3 Year 4
Your firm is considering purchasing a machine with the following annual, end-of-year, book investment accounts. |
Purchase Date | Year 1 | Year 2 | Year 3 | Year 4 | |
Gross investment | $55,000 | $55,000 | $55,000 | $55,000 | $55,000 |
Less: Accumulated depreciation | 0 | 13,750 | 27,500 | 41,250 | 55,000 |
Net investment | $55,000 | $41,250 | $27,500 | 13,750 | $ 0 |
The machine generates, on average, $5,300 per year in additional net income. |
What is the average accounting return for this machine? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) |
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