A machine costs $600,000 and is expected to yield an after-tax net income of $23,000 each year. Management predicts this machinehas a 12-year service life and a $120,000 salvage value, and it uses straight-line depreciation. Compute this machine's accounting rateof return.Choose Numerator:Annual after-tax net income$123,000 /Accounting Rate of ReturnChoose Denominator:Annual average investment$=360,000 =< PrevAccounting Rate of ReturnAccounting rate of return6.39 %7 of 11Next >Insert A machine costs $600,000 and is expected to yield an after-tax net income of $23,000 each year. Management predicts this machinehas a 12-year service life and a $120,000 salvage value, and it uses straight-line depreciation. Compute this machine's accounting rateof return.Choose Numerator:Annual after-tax net incomeܢܢܢܢܢܢ22.00011IAccounts receivableAnnual after-tax net incomeAnnual average investmentAnnual pre-tax incomeAverage total assetsCost of goods soldAccounting Rate of ReturnChoose Denominator:Annual average investment$=< Prev=360,000 =Accounting Rate of ReturnAccounting rate of return6.39 %7 of 11FHNext >

Annual rate of return :- Annual rate of return by taking Annual profit after tax dividend by Annual…

has a 12-year service life and a $120,000 salvage value, and it uses straight-line depreciation. Compute this machine's accounting rate of return. Accounting Rate of Return Choose Denominator: /Annual average investment 23,000/ $ Choose Numerator: Annual after-tax net income $ 1 360,000 = Accounting Rate of Return Accounting rate of return 6.39 % =

has a 12-year service life and a $120,000 salvage value, and it uses straight-line depreciation. Compute this machine's accounting rate of return. Accounting Rate of Return Choose Denominator: /Annual average investment 23,000/ $ Choose Numerator: Annual after-tax net income $ 1 360,000 = Accounting Rate of Return Accounting rate of return 6.39 % =

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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Your firm is considering purchasing a machine with the following annual, end-of-year, book investment accounts. Gross investment Less: Accumulated depreciation Net investment AAR Year O $ 71,000 $ 0 % Year 2 Year 1 Year 3 Year 4 71,000 $ 71,000 $ 71,000 $ 71,000 17,750 35,500 53,250 71,000 The machine generates, on average, $7,300 per year in additional net income. What is the average accounting return for this machine? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) $ 71,000 $ 53,250 $35,500 $ 17,750 $ 0
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Quary Company is considering an investment in machinery with the following information. Initial investment $ 308,000 Materials, labor, and overhead (except depreciation) $ 69,300 Useful life 9 years Depreciation—Machinery 32,000 Salvage value $ 20,000 Selling, general, and administrative expenses 7,700 Expected sales per year 15,400 units Selling price per unit $ 10 (a) Compute the investment’s annual income and annual net cash flow.(b) Compute the investment’s payback period. Please also help with what I need to use to fill in the blanks on the first image. "Required A"
Required information [The following information applies to the questions displayed below.] Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The investment costs $45,000 and has an estimated $6,000 salvage value. Compute the accounting rate of return for this investment; assume the company uses straight-line depreciation. Choose Numerator: 1 1 Accounting Rate of Return Choose Denominator: G O
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