Smith & Cramer,Computer Repair,is Considering an Investment in Computer and Network

question 22

Multiple Choice

Smith & Cramer,Computer Repair,is considering an investment in computer and network equipment costing $254,000.This equipment would allow them to offer new programming services to clients.The equipment will be depreciated on the straight-line basis over an eight-year period with an estimated residual value of $60,000.Using the accounting rate of return model,what is the minimum average annual operating income that must be generated from this investment in order to achieve an 11% accounting rate of return?

• A)$6,600
• B)$21,340
• C)$31,750
• D)$27,940

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Definitions:

Committee on Administrative Management

A committee established to study and improve the organization and operations of the federal government.

President Needs Help

In the context of governance and political administration, this phrase suggests the idea that a President requires the support of advisors, cabinet members, and other government officials to effectively execute the duties of the office.

Executive Branch

Refers to the part of the U.S. government responsible for implementing and enforcing laws, led by the President.

Devolution

The transfer of power or responsibilities from a central government to local or regional administrations.