Question: A machine will cost TZS 1 0 , 0 0 0 , 0 0 0 . It is expected to provide profits before depreciation of

A machine will cost TZS 10,000,000.It is expected to provide profits before depreciation of TZS 3,000,000 each in year 1 and 2 and TZS 4,000,000 each in year 3 and 4. Assuming a straight-line depreciation and no taxes, what is the average accounting rate of return? What will be your answer, if the tax rate is 35%. Please assist to show the calculation.

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