A manufacturer is considering buying a new machine that will allow it to produce a new product. Information for two alternative machine investments follows. Initial investment Salvage value Annual income Machine 1 Machine 2 $ (128,000) $ (98,000) 0 14,080 18,000 11,600 Enter answers in the tabs below. Required A Required B Compute accounting rate of return for each machine. Accounting Rate of Return Denominator: Numerator: I Machine 1 Machine 2 Accounting rate of return 0 0

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A manufacturer is considering buying a new machine that will allow it to produce a new product. Information for two alternative
machine investments follows.
Initial investment
Salvage value
Annual income
Machine 1
Machine 2
$ (128,000)
$ (98,000)
0
14,080
18,000
11,600
Enter answers in the tabs below.
Required A
Required B
Compute accounting rate of return for each machine.
Accounting Rate of Return
Denominator:
Numerator:
I
Machine 1
Machine 2
Accounting rate of return
0
0
Transcribed Image Text:A manufacturer is considering buying a new machine that will allow it to produce a new product. Information for two alternative machine investments follows. Initial investment Salvage value Annual income Machine 1 Machine 2 $ (128,000) $ (98,000) 0 14,080 18,000 11,600 Enter answers in the tabs below. Required A Required B Compute accounting rate of return for each machine. Accounting Rate of Return Denominator: Numerator: I Machine 1 Machine 2 Accounting rate of return 0 0
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