. . / connect ,\' connect xDon Omar - Angelito- YouT x Managerial Accounting Con
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. . / connect ,' connect xDon Omar - Angelito- YouT x Managerial Accounting Connect CSecure https://newconnect.mheducation.com/flow/connect.html Chapter 11 Quiz Help Save& Exit Submit Saved A company is planning to purchase a machine that will cost $24,600 with a six-year life and no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the accounting rate of return for this machine? Sales Costs: Manufacturing Depreciation on machine Selling and administrative expenses Income before taxes Income tax (35%) Net income s 91,000 00:26:57 $52,100 4,100 31,000(87,200) eBook $ 3,800 (1,330) $ 2,470 Multiple Choice 4.10%. 33.33%. 50.00%. Mc Graw Next>Explanation / Answer
The accounting rate of return is computed by dividing the Average Net profit by the Average investment each year.
The Net profit per year ( as per the given table) = 2470
Average investment each year = 24600/6 = 4100
Accounting rate of return = 2470/4100 = 0.6024 = 60.24%
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