A Company Is Planning to Purchase a Machine That Will

question 114

Multiple Choice

A company is planning to purchase a machine that will cost $24,000, have a six-year life, and be depreciated over a three-year period with no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the accounting rate of return for this machine?

• A) 33.3%.
• B) 16.7%.
• C) 50.0%.
• D) 8.3%.
• E) 4%.

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Definitions:

Competitive Advantage

A unique attribute or position that allows an organization, country, or individual to outperform its competitors, leading to greater sales, margins, or customer loyalty.

Diverse Workforce

A workforce composed of individuals from a variety of backgrounds, including different races, ethnicities, genders, ages, religions, abilities, and sexual orientations.

Cultural Competency

The ability to understand, appreciate, and interact effectively with people of different cultures, recognizing and respecting their differences.

Stealth Marketing

A marketing strategy that advertises a product to people without them realizing they are being marketed to.