McDonald Industries is considering the purchase of a $180,000 machine that is expected to result in a decrease of $20,000 per year in cash expenses. This machine, which has no residual value, has an estimated useful life of 15 years and will be depreciated on a straight-line basis. For this machine, the accounting rate of return would be
a. 4.4 percent
b. 8.9 percent
c. 11.1 percent
d. 22.2 percent
B
ARR=(Net Decrease in Exp/Avg. Investment)
$(20,000-12,000)/($180,000/2) = 8.9%
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Accrued interest receivable is a(n)
a. revenue account; b. liability account; c. asset account; d. revenue account; e. expense.
The most common form of testing for advertising concepts is the use of focus groups
Indicate whether the statement is true or false
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A. assortment. B. allocation. C. accumulation. D. picking. E. sortation.