What is the average accounting return for this machine

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Question - Your firm is considering purchasing a machine with the following annual, end-of-year, book investment accounts.

Purchase Date Year 1 Year 2 Year 3 Year 4

Gross investment $69,000 $69,000 $ 69,000 $ 69,000 $ 69,000

Less: Accumulated depreciation 0 17,250 34,500 51,750 69,000

Net investment $ 69,000 $ 51,750 $ 34,500 $ 17,250 $ 0

The machine generates, on average, $5,700 per year in additional net income.

What is the average accounting return for this machine?

Reference no: EM131898501

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