Flip Flop Company Is Considering Investing in Production-Management Software That

Multiple Choice

Flip Flop company is considering investing in production-management software that costs $630,000,has $64,000 residual value and should lead to cost savings of $2,350,000 per year for its five-year life.Calculate the average amount invested in the asset that should be used for calculating the accounting rate of return?

A) $630,000
B) $347,000
C) $694,000
D) $64,000