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What the accounting rate of return would be

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Reference no: EM132811140

Problem 1: Microsoft Co. is considering the purchase of a P100,000 machine that is expected to result in a decrease of P15,000 per year in cash expenses. This machine, which has no residual value, has an estimated useful life of 10 years and will be depreciated on a straight-line basis. For this machine, the accounting rate of return would be

a. 10 percent.

b. 15 percent.

C. 30 percent.

d. 35 percent.

Reference no: EM132811140

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