A company buys a machine for $76,000 that has an expected life of 6 years and no salvage value. The company uses straight-line depreciation. The company anticipates a yearly after tax net income of $1,805. What is the accounting rate of return?
A. 42.75%.
B. 9.50%.
C. 4.75%.
D. 6.65%.
E. 2.85%.
Answer: C
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