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Your firm is considering purchasing a machine with the following annual, end-of-year, book investment accounts. Year 0 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. |
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | ||||||
| Gross investment | $ | 60,000 | $ | 60,000 | $ | 60,000 | $ | 60,000 | $ | 60,000 |
| Less: Accumulated depreciation | 0 | 15,000 | 30,000 | 45,000 | 60,000 | |||||
| Net investment | $ | 60,000 | $ | 45,000 | $ | 30,000 | $ | 15,000 | $ | 0 |
| The machine generates, on average, $6,400 per year in additional net income. What is the average accounting return for this machine? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
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Focus On Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert J. Hughes, Melissa Hart
7th Edition
1265521972, 978-1265521974
