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Question
A company is considering the purchase of a new machine for $48,000. Management predicts that the machine can produce sales of $16,000 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling $8,000 per year plus depreciation of $4,000 per year. The company's tax rate is 40%. What is the approximate accounting rate of return for the machine?A. 13%.
B. 17%
C. 8%
D. 27%
E. 10%
Answer
This answer is hidden. It contains 127 characters.
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Direct labor X X
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Variable manufacturing overhead
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Direct materials
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Match the following
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