Omaha Plating Corporation Is Considering Purchasing a Machine for $1,500,000

question 27

Multiple Choice

Omaha Plating Corporation is considering purchasing a machine for $1,500,000.The machine will generate a constant after-tax income of $100,000 per year for 15 years.The firm will use straight-line (SL) depreciation for the new machine over 10 years with no residual value.
What is the annual accounting (book) rate of return (rounded) on the initial investment?

• A)6.67%.
• B)10.00%.
• C)13.33%.
• D)16.67%.
• E)23.33%.

---

Definitions:

Wheat Yield

The amount of wheat produced per unit area, commonly measured in bushels per acre or kilograms per hectare.

Rainfall

The total amount of rain that falls in a specific area over a specific period, often measured in millimeters or inches.

Collaboration

The action of working with someone to produce or create something, often involving shared goals and cooperative efforts.

Interest

The feeling of wanting to know or learn about something or someone.