Question: A machine costs $500,000 and is expected to yield an after-tax net income of $15,000 each year. Management predicts this machine has a 10-year service

A machine costs $500,000 and is expected to yield an after-tax net income of $15,000 each year. Management predicts this machine has a 10-year service life and a $100,000 salvage value, and it uses straight-line depreciation. Compute this machine’s accounting rate of return.

Step by Step Solution

★★★★★

3.33 Rating (159 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Average investmen... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

202-B-M-A-C-B-D (437).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!

A machine costs $700,000 and is expected to yield an after-tax net income of $52,000 each year. Management predicts this machine has a 10-year service life and a $100,000 salvage value . Compute this...

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...

An investment opportunity costing $85,000 is expected to yield net cash flows of $15,000 annually over six years. A: Calculate the Net Present Value of the investment at a discount rate of 12% B:...

Calculation of Accounting Rate of Return: Equipment One costs $400,000 and is expected to yield an after-tax net income of $15,000 each year. Management predicts this machine has a 10-year service...

A machine costs $200,000 and is expected to yield an after tax net income of $5,000 each year. Management predicts this machine has a 9 year service life and a $40,000 salvage volue, and it uses...

A machine costs $600,000 and is expected to yield an after tax net income of $23,000 each year Management predicts this machine has a 9.year service life and a $120,000 salvage value, and it uses...

The payback period is the amount of time for the investment to generate enough net cash flow to return the initial cost of Investment True or False True False Using a profitability Index allows...

with solution please thank youu analysis is the breakeven point. Once the breakeven point has been Cost-volume-profit (CVP) analysis is a key factor in many decisions, including choice of product...

company's most profitable product; Z is the least profitable. Which The installation of new computer-controlled machinery and Which of the following would decrease unit contribution margin the 10....

A machine can be purchased for $295,000 and used for five years, yielding the following net incomes. In projecting net incomes, double-declining depreciation is applied, using a five-year life and a...

A 50-MHz generator with Zg = 50 is connected to a load ZL= 50 j25- . The time-average power transferred from the generator into the load is maximum when Zg = Z_L_ where Z _L is the complex...

There are five types of management earnings techniques presented in this chapter. Provide two or three specific examples of how corporate leaders could pull off these types of fraud, as well as the...

Select all that apply Identify which of the following specific areas are considered the bulling blocks of financial statement analysis. Ratio analysis I ig - idity and efficiency Market prospects...

For each of the following situations, state whether a Type I, a Type II, or neither error has been made. a) A test of H 0 : m = 25 vs. H A : m 7 25 rejects the null hypothesis. Later it is discovered...

Suppose that you are testing the hypotheses H0: = 80 vs. HA: 80. A sample of size 61 results in a sample mean of 75 and a standard deviation of 1.5. a) What is the standard error of the mean? b)...

Suppose that you are testing the hypotheses H0: p = 0.40 vs. HA: p > 0.40. A sample of size 200 results in a sample proportion of 0.55. a) Construct a 90% confidence interval for p. b) Based on the...

For each of the following situations, find the critical value for z or t. a) Ho: ( = 105 vs. HA: ( 105 at ( = 0.05; n = 61. b) Ho: p = 0.05 vs. HA: p > 0.05 at ( = 0.05. c) Ho: p = 0.6 vs. HA: p ...

Last year, K9 WebbWear, Inc., reported an ROE of 20 percent. The firms debt ratio was 55 percent, sales were $20 million, and the capital intensity was 1.25 times. Calculate the net income and profit...

5. T or F Many body language cues are expressed unconsciously.

Journalize the following transactions in the accounts of Zippy Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables: May 24. Sold...

At the end of the current year, Accounts Receivable has a balance of $5,125,000; Allowance for Doubtful Accounts has a debit balance of $32,600; and sales for the year total $105,550,000. Using the...

At the end of the current year, Accounts Receivable has a balance of $5,125,000; Allowance for Doubtful Accounts has a debit balance of $32,600; and sales for the year total $105,550,000. Bad debt...

Ashley Limiteds overhead costs of $700,000 consist of machining $400,000; inspecting $200,000; and packaging $100,000. Machining works 4,000 hours a year, 500 inspections occur each year, and 1,000...

ANSWER ALL FOR THUMBS IF ONLY ONE IS ANSWERED I WILL GIVE THUMBS DOWN 1.1 1.2 1.3 (Yield to maturity) Fitzgerald's 15-year bonds pay 11 percent interest annually on a $1,000 par value. If the bonds...

what is the answer? please and thanks. A stock is trading for a share price of $21.61. You expect it to pay a dividend of $136 exactly one year from now, and you expect future annual dividends to...