Question : 71. What the accounting rate of return for this machine?A.  : 1256789

 

 

71. What is the accounting rate of return for this machine?A.  14.28%B.  17.14%C.  60.0%D.  8.57%E.  7%

 

 

72. After-tax net income divided by the annual average investment is the:A.  Net present value rate.B.  Payback rate.C.  Accounting rate of return.D.  Earnings from investment.E.  Profit rate.

 

 

73. A company buys a machine for $60,000 that has an expected life of nine years and no salvage value. The company anticipates a yearly net income of $2,850 after taxes of 30%, with the cash flows to be received evenly throughout of each year. What is the accounting rate of return?A.  2.85%B.  4.75%C.  6.65%D.  9.50%E.  42.75%

 

 

 

 

 

 

 

 

 

 

 

74. Monterey Corporation is considering the purchase of a machine costing $36,000 with a six-year useful life and no salvage value. Monterey uses straight-line depreciation and assumes that the annual cash inflow from the machine will be received uniformly throughout each year. In calculating the accounting rate of return, what is Monterey’s average investment?A.  $6,000B.  $7,000C.  $18,000D.  $21,000E.  $36,000

 

 

75. Beyer Corporation is considering buying a machine for $25,000. Its estimated useful life is five years, with no salvage value. Beyer anticipates annual net income after taxes of $1,500 from the new machine. What is the accounting rate of return assuming that Beyer uses straight-line depreciation and that income is earned uniformly throughout each year?A.  6.0%B.  8.0%C.  8.5%D.  10.0%E.  12.0%

 

 

76. The following data concerns a proposed equipment purchase: 

Cost

$144,000

Salvage value

$4,000

Estimated useful life

4 years

Annual net cash flows

$46,100

Depreciation method

Straight-line

Assuming that net cash flows are received evenly throughout the year, the accounting rate of return is:A.  62.3%B.  32.0% C.  15.0%D.  7.7%E.  5.0%

 

 

77. The following data concerns a proposed equipment purchase: 

Cost

$278,000

Salvage value

$    6,000

Estimated useful life

8 years

Annual net cash flows

$  46,360

Depreciation method

Straight-line

Assuming that net cash flows are received evenly throughout the year, the accounting rate of return is:A.  34.09%B.  32.64%C.  8.35%D.  8.70%E.  16.67%

 

 

 

 

 

 

78. The accounting rate of return is calculated as:A.  The after-tax income divided by the total investment.B.  The after-tax income divided by the average investment.C.  The cash flows divided by the average investment.D.  The cash flows divided by the total investment.E.  The average investment divided by the after-tax income.

 

 

79. The following data concerns a proposed equipment purchase: 

Cost

$58,000

Salvage value

$  3,000

Estimated useful life

5 years

Annual net cash flows

$18,000

Depreciation method

Straight-line

Assuming that net cash flows are received evenly throughout the year, the accounting rate of return is:A.  24.13%B.  20.98%C.  22.95%D.  59.00%E.  25.45%

 

 

 

 

 

 

 

 

80. A company bought a machine that has an expected life of seven years and no salvage value. Management estimates that this machine will generate annual after-tax net income of $540. If the accounting rate of return is 12%, what was the purchase price of the machine?A.  $4,500B.  $540C.  $31,500D.  $9,000E.  $2,250