Question: The company is considering a new computer system that has an inital investment of $50,000. Annual expected incremental revenue is $12,000, and annual expected incremental

The company is considering a new computer system that has an inital investment of $50,000.

Annual expected incremental revenue is $12,000,

and annual expected incremental operating expense is $1,000.

The expected useful life of the system is 5 years.

There is no salvage value of the system.

The annual accrual accounting rate of return is:

Inncreased i expected avg annual after tax- Operating income/ Net Initial investment:

12,000-1000=11,000/50,000=.22 correct?

calculate before answer.

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