The Harris Corporation Bought a New Machine That Cost $170,000

question 17

Essay

The Harris Corporation bought a new machine that cost $170,000 with a 15-year life and a residual value of $20,000.They plan to generate annual cash inflows of $40,000 over 15 years.Calculate the accounting rate of return.

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Definitions:

Consumer Surplus

The gap between what consumers are ready to pay in total and what they end up actually paying.

Consumer Surplus

The distinction between the total cost consumers are willing to offer for a good or service and the amount they eventually pay.

Surplus II

An excess amount of a product or resource compared to the demand, often resulting in lower prices.

Surplus III

An excess of production or supply over demand, often referring to goods in a market that exceed buyer requirements.