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seraphel seraphel
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A month ago
Morrow Company is considering a purchase of equipment that costs $70,000. The equipment has a 7-year life and no salvage value. Morrow uses straight-line depreciation. The equipment has a payback period of 4 years. The accounting rate of return is closest to

▸ 3.5%.

▸ 39%.

▸ 25%.

▸ 10.7%.
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Managerial Accounting

Managerial Accounting


Edition: 4th
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Dark_ShadowDark_Shadow
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A month ago
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10.7%.

($70,000 ÷ 4) - ($70,000 ÷ 7) = $7,500;
$7,500 ÷ $70,000 = 10.7%
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