Solved: Calculate the accounting rate of return, Finance Basics

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Calculate the accounting rate of return

Problem: A machine was purchased for $10,000. The net income from the machine is as follows:

Year 1 $3,000
Year 2 2,000
Year 3 1,000

Q1. Calculate the accounting rate of return.

Q2. What are the drawbacks to using the accounting rate of return as a method of selecting projects?

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Finance Basics: Calculate the accounting rate of return

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Finance Basics: Calculate the accounting rate of return

Reference No:- TGS02049145

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