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QUESTION 27 1. K-Flouride plc has considering investing in a machine which costs 1.8m. They...

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Accounting

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QUESTION 27 1. K-Flouride plc has considering investing in a machine which costs 1.8m. They plan to keep the machine for seven years and then plan to sell it on the second-hand market for an estimated value of 400,000. The machine would generate net cash inflows of 430,000 each year. Using the average investment method what is the accounting rate of return (ARR) for K-Flouride ple's new machine? A. 12.5% B. 20.9% C. 15.5% D.17.8% E. 18.8%

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