Solution-Accounting rate of return as a percent

Accounting rate of return as a percent

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Reference no: EM133071711

Blossom Corp. management is considering purchasing a machine that will cost $117,250 and will be depreciated on a straight-line basis over a five-year period. The sales and expenses (excluding depreciation) for the next five years are shown in the following table. The company's tax rate is 34 percent.

	Year 1	Year 2	Year 3	Year 4	Year 5
Sales	$124,450	$174,875	$237,455	$251,440	$263,125
Expenses	$140,410	$130,488	$137,289	$140,112	$129,556

Blossom will accept all projects that provide an accounting rate of return (ARR) of at least 45 percent.

Accounting Rate of Return as a percent?

Reference no: EM133071711

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Accounting rate of return as a percent

Reference no: EM133071711

Reference no: EM133071711

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