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* Data Table Year Amount $ 11,000 9,000 7,000 4,000 $ 31,000 Print Done

Chicago Cola is considering the purchase of a special-purpose bottling machine for $24,000. It is expected to have a useful l

5. Accrual accounting rate of return based on net initial investment (Assume straight-line depreciation. Use the average annu

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Answer:

5) Accrual accounting rate of return = average annual accounting profit/Initial investment

                                                = [(31,000/4)-(24,000/4)]/24,000

                                              = [7750-6000]/24,000

                                             = 1750/24000

                                             = .0729 or 7.29%

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