Average investment cost and the accounting rate of return

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Reference no: EM13747777

Doorstep Cleaners is considering whether to purchase a delivery truck that will cost $50,000, last six years, and have an estimated residual value of $5,000. Average annual net income from the delivery service is estimate to be $4,000. Doorstep cleaners’ owners seek to earn an accounting rate of return of 10%. Compute the average investment cost and the accounting rate of return. (round % to one decimal place.) Should the investment be made?

Reference no: EM13747777

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