A Company Is Evaluating the Purchase of a Machine for $900,000

question 124

Short Answer

A company is evaluating the purchase of a machine for $900,000 with a six-year useful life and no salvage value. The company uses straight-line depreciation and it assumes that the annual net cash flow from using the machine will be received uniformly throughout each year. In calculating the accounting rate of return, what is the company's average investment?

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Definitions:

Behavior Therapy Program

A structured approach to treat psychological disorders through techniques that change dysfunctional behaviors.

Role-playing Exercises

Interactive activities where individuals act out roles in specific scenarios to learn, practice skills, or understand different perspectives.

Systematic Desensitization

A therapeutic technique used to help individuals overcome phobias and anxieties by gradually exposing them to the feared object or situation in a controlled manner.

Anxieties Disorders

Mental health disorders characterized by significant anxiety and fear, impacting daily functioning.