Calculating Accounting Rate of Return
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A machine was purchased for $10,000. The net income from the machine is as follows:
Year 1 $3,000
Year 2 2,000
Year 3 1,000
A. Calculate the accounting rate of return.
B. What are the drawbacks to using the accounting rate of return as a method of selecting projects?
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The response provides steps in calculating Accounting Rate of Return.
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A machine was purchased for $10,000. The net income from the machine is as follows:
Year 1 $3,000
Year 2 ...
Purchase this Solution
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