Datasoft Industries is considering the purchase of a $100,000 machine that is expected to result in a decrease of $15,000 per year in cash expenses

Finance Mar 13, 2021

Datasoft Industries is considering the purchase of a $100,000 machine that is expected to result in a decrease of $15,000 per year in cash expenses. This machine, which has no residual value, has an estimated useful life of 10 years and will be depreciated on a straight-line basis. For this machine, the accounting rate of return would be

a. 10 percent.

1. 15 percent.
2. 30 percent.
3. 35 percent.

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