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Determine the accounting rate of return

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Reference no: EM132838688

Question - GALINDO Company is planning to buy a new machine that can produce additional 20,000 units of product per year. The product sells for P50 each. The cost associated with the product per year is P30 per unit, exclusive of depreciation on the new machine. The new machine which is expected to last for 10 years will cost P500,000. No salvage value is expected to be recovered at the end of its life. Tax rate is 30%. Determine the accounting rate of return?

Reference no: EM132838688

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