What three flaws are inherent in this decision rule, Accounting Basics

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What three flaws are inherent in this decision rule

Average Accounting Return. Your firm is considering purchasing a machine with the following annual, end-of-year, book investment accounts.
Purchase Date Year 1 Year 2 Year 3 Year 4
Gross Investment $28,000.00 $28,000.00 $28,000.00 $28,000.00 $28,000.00
Less: Accumulated Depreciation $0.00 $7,000.00 $14,000.00 $21,000.00 $28,000.00
Net Investment $28,000.00 $21,000.00 $14,000.00 $7,000.00 $0.00

The machine generates, on average, $4300 per uear in additional net income.
a. What is the average accounting return for this machine?
b. What three flaws are inherent in this decision rule?

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Accounting Basics: What three flaws are inherent in this decision rule

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Recent Questions Asked Accounting Basics

Q : Calculate the amounts to be reported by cameron

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Request for Solution File

Ask an Expert for Answer!!

Accounting Basics: What three flaws are inherent in this decision rule

Reference No:- TGS0676240

Recent Questions Asked Accounting Basics

Q : Calculate the amounts to be reported by cameron

Q : What is the break-even sales

Q : The total cost for the job on its job cost sheet

Q : Differences between the birth story in matthew and luke

Q : What three flaws are inherent in this decision rule

Q : What is the apr of your investment

Q : Calculate the prime costs during the month totaled

Q : Calculate the private donations

Q : What does the amount of these debits represent

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