Watson Corporation Is Considering Buying a Machine for $25,000

question 32

Multiple Choice

Watson Corporation is considering buying a machine for $25,000.Its estimated useful life is 5 years,with no salvage value.Watson anticipates annual net income after taxes of $1,500 from the new machine.What is the accounting rate of return assuming that Watson uses straight-line depreciation and that income is earned uniformly throughout each year?

• A)6.0%.
• B)8.0%.
• C)8.5%.
• D)10.0%.
• E)12.0%.

---

Definitions:

Dissatisfaction

The feeling of being unhappy or not pleased with a situation or outcome, often leading to a desire for change or improvement.

Temporary Effects

Short-term impacts or outcomes that are not expected to last over a long period.

Whig Party

A historical political party in the United States that existed from the 1830s to the 1850s, opposing the policies of President Andrew Jackson and the Democratic Party.

Civil War

A war between citizens of the same country, often arising from political, social, or economic disagreements or tensions.