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

question 40

Multiple Choice

A company buys a machine for $60,000 that has an expected life of 9 years and no salvage value.The company uses straight-line depreciation.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%.

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Definitions:

Operating Characteristics Curve

A graphical representation showing the relationship between the capacity of a system or process and one or more of its operating parameters.

Acceptance Sampling

A statistical quality control method where a random sample is tested from a lot, and the lot is accepted or rejected based on the results.

Statistical Process Control

A methodological approach using statistical methods to monitor and control a process, ensuring it operates at its full potential with minimal waste.