A Company Is Considering Purchasing a Machine for $21,000

question 127

Multiple Choice

A company is considering purchasing a machine for $21,000.The machine will generate an after-tax net income of $2,000 per year.Annual depreciation expense would be $1,500.What is the approximate accounting rate of return?

• A) 19%
• B) 33%
• C) 17%
• D) 10%
• E) 25%

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Definitions:

David McClelland

An American psychologist known for his work on motivation theory, particularly related to achievement, power, and affiliation needs.

Henry Murray

An American psychologist known for his theory of personality, which emphasizes human needs and motivation.

David Buss

An evolutionary psychologist who has extensively studied human sex differences in mate selection and strategies.

Prenatal Development

The process of growth and development within the womb from conception to birth, covering various stages of physical, neural, and psychological formation.