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:

Benefits

The advantages or positive outcomes that result from using a product or service.

Ultra Black Label Series

A term that could refer to a premium, high-end series of products within a brand, often denoting exclusivity or superior quality.

Multi-angle Vision Technology

Technology that enables the capture or display of images from multiple perspectives, often used in cameras and surveillance.

Feature

A distinct attribute or aspect of a product that can be used to emphasize its benefits and differentiate it from other products.