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estimated life of project = 5 yrs
cost of machine = 90,000
estimated proceeds of disposal of machineafter 5 yrs = 10,000
additional working capital requred throughout the project = 30,000
additional annual revenue (net) = 15,000
what will be the accounting rate of return?
This is a weird question. The annual depreciation that I get is 16000. Whereas the annual revenue is only 15000. So I'm getting an average loss of 1000. Never saw a question in which we get loss. What part of the question did you have a problem with ?