The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them to determine which one has the best average rate of return.Line Item DescriptionMachine AMachine BMachine CEstimated average income$47,060.44 $72,961.50 $73,785.60 Average investment336,146.00 243,205.00 491,904.00 a. Machine Cb. Machine Ac. Machines B and C have the same preferred average rate of return.d. Machine B

In this question, we will calculate the average rate of return, For determining the average rate of…

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Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter14: Quality And Environmental Cost Management

Section: Chapter Questions

Problem 9E: Stahman, Inc., estimates its hidden external failure costs using the Taguchi loss function. Stahlman...

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The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them to determine which one has the best average rate of return.

Line Item Description	Machine A	Machine B	Machine C
Estimated average income	$47,060.44	$72,961.50	$73,785.60
Average investment	336,146.00	243,205.00	491,904.00

a. Machine C

b. Machine A

c. Machines B and C have the same preferred average rate of return.

d. Machine B

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