A machine costs $600,000 and is expected to yield an after-tax net income of $23,000 each year. Management predicts this machinehas a 12-year service life and a $120,000 salvage value, and it uses straight-line depreciation. Compute this machine's accounting rateof return.Choose Numerator:Annual after-tax net income$123,000 /Accounting Rate of ReturnChoose Denominator:Annual average investment$=360,000 =< PrevAccounting Rate of ReturnAccounting rate of return6.39 %7 of 11Next >Insert A machine costs $600,000 and is expected to yield an after-tax net income of $23,000 each year. Management predicts this machinehas a 12-year service life and a $120,000 salvage value, and it uses straight-line depreciation. Compute this machine's accounting rateof return.Choose Numerator:Annual after-tax net incomeܢܢܢܢܢܢ22.00011IAccounts receivableAnnual after-tax net incomeAnnual average investmentAnnual pre-tax incomeAverage total assetsCost of goods soldAccounting Rate of ReturnChoose Denominator:Annual average investment$=< Prev=360,000 =Accounting Rate of ReturnAccounting rate of return6.39 %7 of 11FHNext >

Annual rate of return :- Annual rate of return by taking Annual profit after tax dividend by Annual…

has a 12-year service life and a $120,000 salvage value, and it uses straight-line depreciation. Compute this machine's accounting rate of return. Accounting Rate of Return Choose Denominator: /Annual average investment 23,000/ $ Choose Numerator: Annual after-tax net income $ 1 360,000 = Accounting Rate of Return Accounting rate of return 6.39 % =

has a 12-year service life and a $120,000 salvage value, and it uses straight-line depreciation. Compute this machine's accounting rate of return. Accounting Rate of Return Choose Denominator: /Annual average investment 23,000/ $ Choose Numerator: Annual after-tax net income $ 1 360,000 = Accounting Rate of Return Accounting rate of return 6.39 % =

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 3P

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