A Company Buys a Machine for $76,000 That Has an Expected

question 29

Multiple Choice

A company buys a machine for $76,000 that has an expected life of 6 years and no salvage value.The company anticipates a yearly after tax net income of $1,805.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:

Validly Infer

To deduce conclusions from premises using logical and sound reasoning.

Comparative Inference

The process of deducing conclusions based on the comparison of multiple instances or pieces of evidence.

Simplicity

In the evaluation of comparisons, is a measure of the relative absence of complexity.

Comparative Reasoning

A method of reasoning that involves comparing similarities and differences among objects, concepts, or situations.