Question: Peng Company is considering buying a machine that will yield income of $2,300 and net cash flow of $16,200 per year for three years.

Peng Company is considering buying a machine that will yield income of

 

Peng Company is considering buying a machine that will yield income of $2,300 and net cash flow of $16,200 per year for three years. The machine costs $48,900 and has an estimated $7,200 salvage value. Compute the accounting rate of return for this investment. Numerator: Accounting Rate of Return Denominator: Accounting Rate of Return Accounting rate of return

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