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Compute the average investment cost and the accounting rate

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Reference no: EM132076822

Question - Doorstep Cleaners is considering whether to purchase a delivery truck that will cost $50,000, last six years, and have an estimated residual value of $5,000. Average annual net income from the delivery service is estimated to be $4,000. Doorstep Cleaners' owners seek to earn an accounting rate of return of 10 percent.

Compute the average investment cost and the accounting rate of return.

Reference no: EM132076822

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