e e 01 secure l https:// ion.com/flow/connect.htm s For quick access, place your

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e e 01 secure l https:// ion.com/flow/connect.htm s For quick access, place your bookmarks here on the bookmarks ba. Import bookmarks now. Ch 11 Homework Help Save& Exit Submi 4 Check my work Required informetion 10 polints Use the following information for the Quick Study below. [The following information applies to the questions displayed below) nvestment for new machinery with a five-year life and a salvage value of Project A requires a $280,000 initial new $30,000. The company uses straight-line depreciation. Project A is expected to yield annual net income of $20.000 per year for the next five years Hint QS 11-6 Accounting rate of return LO P2 Compute Project A's accounting rate of retuirn, Rate of Return g Rate of R Choose Numerator: Annual after-tax net income Choose Annual average rate of retum 20,000 Reference links

Explanation / Answer

Average investment=(280000+30000)/2 = 155000 Annual after­tax net income/Annual average investment = Accounting rate of return 20000/155000= 12.90%

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