Question

The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them to determine the best average rate of return. Which machine has the best average rate of return? Machine A Machine B Machine C Estimated average annual income $43,540 $72,900 $72,600 Average investment 311,000 243,000 484,000

Name: 10 the production department is proposing the purchase of an automatic insertion machine it has identified three machines and has asked the accountant to analyze them to determine the best a 26723
Uploaded: 2022-04-18T16:30:29-08:00
Duration: 3 min 38 s
Channel: Rahul Mahato
Description: 10 the production department is proposing the purchase of an automatic insertion machine it has identified three machines and has asked the accountant to analyze them to determine the best a 26723

          The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them to determine the best average rate of return. Which machine has the best average rate of return?
Machine A
Machine B
Machine C
Estimated average annual income
$43,540
$72,900
$72,600
Average investment
311,000
243,000
484,000

Added by Michael G.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Rahul Mahato

04/18/2022

Step 1

This can be done by dividing the estimated average annual income by the average investment for each machine. For Machine A: Average rate of return = $43,540 / $311,000 = 0.14 or 14% For Machine B: Show more…

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The production department is proposing the purchase of an automatic insertion machine. It has identified three machines and has asked the accountant to analyze them to determine the best average rate of return. Which machine has the best average rate of return? Machine A Machine B Machine C Estimated average annual income $43,540 $72,900 $72,600 Average investment 311,000 243,000 484,000