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ahmed is preparing a capital investment appraisal using the accounting rate of return method, for a project to buy a new machine for £300,000. the machine woll be useable for 5years, after which it will be sold for a scrap value of £10,000. buying the machine will generate profits of £25,000 in the first year, then £85,000 in each subsequent year. what is the accounting rate of return for the machine? a. 47.0% b. 24.3% c. 54.9% d. 50.3%

ahmed is preparing a capital investment appraisal using the accounting rate of return method, for a project to buy a new machine for £300,000. the machine woll be useable for 5years, after which it will be sold for a scrap value of £10,000. buying the machine will generate profits of £25,000 in the first year, then £85,000 in each subsequent year. what is the accounting rate of return for the machine? a. 47.0% b. 24.3% c. 54.9% d. 50.3%

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ahmed is preparing a capital investment appraisal using the accounting rate of return method, for a project to buy a new machine for £300,000. the machine woll be useable for 5years, after which it will be sold for a scrap value of £10,000. buying the machine will generate profits of £25,000 in the first year, then £85,000 in each subsequent year. what is the accounting rate of return for the machine? a. 47.0% b. 24.3% c. 54.9% d. 50.3%
Transcribed Image Text:ahmed is preparing a capital investment appraisal using the accounting rate of return method, for a project to buy a new machine for £300,000. the machine woll be useable for 5years, after which it will be sold for a scrap value of £10,000. buying the machine will generate profits of £25,000 in the first year, then £85,000 in each subsequent year. what is the accounting rate of return for the machine? a. 47.0% b. 24.3% c. 54.9% d. 50.3%
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