A company is planning to purchase a machine that will cost $24,600 with a six-year life...

 

Transcribed Image Text:

A company is planning to purchase a machine that will cost $24,600 with a six-year life and no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the accounting rate of return for this machine? $ 91,000 Sales Costs: Manufacturing $52,100 Depreciation on machine Selling and administrative expenses 4,100 31,000 (87,200) $ 3,800 (1,330) $ 2,470 Income before taxes Income tax (35%) Net income Multiple Choice 3333%. 50.00% 4.10%. 20.08%. 10.04% A company is planning to purchase a machine that will cost $24,600 with a six-year life and no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the accounting rate of return for this machine? $ 91,000 Sales Costs: Manufacturing $52,100 Depreciation on machine Selling and administrative expenses 4,100 31,000 (87,200) $ 3,800 (1,330) $ 2,470 Income before taxes Income tax (35%) Net income Multiple Choice 3333%. 50.00% 4.10%. 20.08%. 10.04%

Answer rating: 100% (QA)

Answer 2008 Accounting Ra... View the full answer