1a.

2b.

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 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: Choose Numerator: 1 Accounting Rate of Return Accounting rate of return Required information [The following information applies to the questions displayed below.) Project A requires a $370,000 initial investment for new machinery with a five-year life and a salvage value of $32,500. The company uses straight-line depreciation. Project A is expected to yield annual net income of $23,000 per year for the next five years. Compute Project A's accounting rate of return. Choose Numerator: Annual after-tax net income Accounting Rate of Return Choose Denominator: 1 Annual average investment 11 Accounting Rate of Return Accounting rate of return 0 1