A New Machine Will Cost $30,000 and Is Expected to Produce

question 63

Multiple Choice

A new machine will cost $30,000 and is expected to produce income of $7,000 in year 1, $9,000 in year 2, $12,000 in year 3 and $15,000 in year 4. The company will depreciate the equipment fully using the straight-line method over the same four year period. What is the average accounting return (ARR) of the project?

• A)​143%
• B)​71.66%
• C)​46.66%
• D)​35.83%

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