Question: A machine costs $200,000 and is expected to yield an after-tax net income of $5,040 each year. Management predicts this machine has a 12-year service

A machine costs $200,000 and is expected to yield an after-tax net income of $5,040 each year.

Management predicts this machine has a 12-year service life and a $40,000 salvage value, and it uses straight-line depreciation. Compute this machine’s accounting rate of return.

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