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A company is planning to purchase a machine that will cost $24,000 with a six-year life and no salvage value. The company uses straight-line depreciation. 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

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Answer:

The question is not complete,find attached complete question:

The correct answer is 16.7%

Explanation:

Accounting rate of return is the annual return on  an investment project based on comparing annual profit with the cost of new investment project.

The formula is given as annual profit figure(earnings before taxes) divided by the average investment made.

annual profit as seen in the attached is $4000

average investment=$16,000

Accounting rate of return=$4,000/$24,000=16.7%

The correct option is the second one

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