A company is to spend $50,000 on a machine that will have an economic life of ten years, and no residual value. Depreciation is to be charged using the straight‐line method. Estimated operating cash flows are: Year 1 $ 1 -2000 2 13000 3 20000 4-6 25000 each year 7-10 30000 each year What is the average accounting of return (ARR), calculated as average annual profits divided by the average investment?
