A Company Is Evaluating the Purchase of a Machine for $750,000

question 119

Short Answer

A company is evaluating the purchase of a machine for $750,000 with a nine-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:

Infantile Amnesia

The common inability of adults to remember the earliest years of their childhood, typically from birth until around 4 years of age.

Stranger Anxiety

Describes a developmental stage in infants and young children where they experience fear or distress around unfamiliar people.

Assimilation

The cognitive process of integrating new information into existing schemas or frameworks, often discussed in the context of learning and development.

Insecure Attachment

A type of attachment style where individuals show a lack of confidence in the availability and responsiveness of their attachment figures.