A Company Buys a Machine for $60,000 That Has an Expected

question 60

Multiple Choice

A company buys a machine for $60,000 that has an expected life of 9 years and no salvage value. The company anticipates a yearly net income of $2,850 after taxes of 30%, with the cash flows to be received evenly throughout each year. What is the accounting rate of return?

• A) 2.85%.
• B) 4.75%.
• C) 6.65%.
• D) 9.50%.
• E) 42.75%.

---

Definitions:

Auditor

A professional who examines the financial records of an organization to ensure accuracy, compliance with standards, and to suggest improvements.

Delegate Duty

A concept where an individual or entity assigns responsibilities or tasks to another party, typically to ensure tasks are completed by those with specific expertise.

Professional

An individual who is expert and skilled in a particular field, typically requiring specialized education and training.

Client Consent

Agreement from a client, often required by law or professional standards, before certain actions are undertaken on their behalf.