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Calculate the accounting rate of return on the machine

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Reference no: EM131750511

Question - Horn Company is considering the purchase of a new machine for $108,000. The machine would replace an old piece of equipment that costs $41,830 per year to operate. The new machine would cost $25,720 per year to operate. The old machine currently in use can be sold for $9,500 if the new machine is purchased. The new machine would have a useful life of ten years with a $6,000 salvage value.

Calculate the accounting rate of return on the machine that Horn Company is considering buying. Enter your answer as a number followed by the percentage symbol with no spaces in between (i.e., 29%).

Reference no: EM131750511

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