Question: 20 - Your firm is considering purchasing a machine that requires an annual investment of 18,000. Depreciation is calculated using a 20 percent reducing balance
20 - Your firm is considering purchasing a machine that requires an annual investment of 18,000. Depreciation is calculated using a 20 percent reducing balance (i.e., instead of depreciating the machine by the same amount each year, we depreciate the residual value of the investment by 20 percent.) The machine generates, on average, 4,900 per year in additional net income. Assume that the estimated economic life is five years. What is the average accounting return for this machine? a) 45.3% b) 34.3% c) None d) 40.49% e) 53.8% Bo brak
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