What is approximate accounting rate of return for machine

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Reference no: EM13754340

A company is considering the purchase of a new machine for $54,400. Management predicts that the machine can produce sales of $37,600 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling $19,200 per year plus depreciation of $9,600 per year. The company's tax rate is 40%. What is the approximate accounting rate of return for the machine?

19.4%

32.4%

16.2%

1.4%

52.9%

Reference no: EM13754340

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