Solution-Calculate accounting rate of return use annual net

Calculate accounting rate of return use annual net income

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Reference no: EM132530390

The following relates to a proposed equipment purchase:

Cost $144,000

Salvage value $4,000

Estimated useful life 4years

Annual net cash flows $46,100

Depreciation method Straight-line

Question 1: Ignoring income taxes, the annual net income amount used to calculate the accounting rate of return is:

Multiple Choice

Option 1: $46,100

Option 2: $11,100

Option 3: $12,100

Option 4: $74,000

Option 5: $48,950

Reference no: EM132530390

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Calculate accounting rate of return use annual net income

Reference no: EM132530390

Reference no: EM132530390

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