Problem 7-5 Average Accounting Return

Your firm is considering purchasing a machine with the following annual, end-of-year, book investment accounts.

	Purchase Date				Year 1				Year 2				Year 3				Year 4
Gross investment	$	74,000			$	74,000			$	74,000			$	74,000			$	74,000
Less: Accumulated depreciation		0				18,500				37,000				55,500				74,000
Net investment	$	74,000			$	55,500			$	37,000			$	18,500			$	0

The machine generates, on average, $8,300 per year in additional net income. What is the average accounting return for this machine? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) AAR %