[The Following Information Applies to the Questions Displayed Below

question 13

Multiple Choice

[The following information applies to the questions displayed below.]
Helicopter Gear is planning to expand its product line,which requires investment of $475,200 in special-purpose machinery.The machinery has a useful life of six years and no salvage value.The estimated annual results of offering the new products are as follows:
All revenue from the new products and all expenses (except depreciation) will be received or paid in cash in the same period as recognized for accounting purposes.
-The return on average investment for this proposed investment is closest to:

• A)8.3%.
• B)50%.
• C)25%.
• D)11.1%.

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Definitions:

Communications

The act or process of exchanging information and ideas through various mediums and platforms.

Transaction Costs

Expenses incurred when buying or selling goods and services, encompassing fees, taxes, and other costs.

Middlemen

People who buy and sell goods or services or arrange trades. A middleman reduces transaction costs.

Transaction Costs

Expenses incurred when buying or selling goods and services, which can include fees, taxes, and other charges.