FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The production department is proposing the purchase of an automatic insertion machine. It has identified three
machines and has asked the accountant to analyze them to determine which one has the best average rate of return.
Estimated average income
Average investment
Machine C
Machines B and C have the same preferred average rate of return.
Machine A
Machine A
$ 40,000
300,000
Machine B
Machine B
$ 50,000
250,000
Machine C
$ 75,000
500,000
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Transcribed Image Text:The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them to determine which one has the best average rate of return. Estimated average income Average investment Machine C Machines B and C have the same preferred average rate of return. Machine A Machine A $ 40,000 300,000 Machine B Machine B $ 50,000 250,000 Machine C $ 75,000 500,000
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