A Machine Costs $180,000 and Is Expected to Yield an After-Tax

question 139

Multiple Choice

A machine costs $180,000 and is expected to yield an after-tax net income of $10,800 each year. Management estimates the machine will have a ten-year life, a $20,000 salvage value, and straight-line depreciation is used. Compute the accounting rate of return for the investment.

• A) 12.0%.
• B) 26.8%.
• C) 11.8%.
• D) 10.8%.
• E) 28.8%.

---

Definitions:

Psychotherapists

Professionals trained to treat psychological disorders and mental distress through verbal and psychological techniques.

Illusory Correlation

The perception of a relationship between two variables even when no such relationship exists.

Confirmation Bias

The inclination to seek out, understand, prefer, and remember information in a manner that validates one's existing beliefs or theories.

Cognitive Error

Faulty thinking patterns that lead to misinterpretation of experiences or interactions.