Sayer Tool Co. is considering investing in specialized equipment costing $620,000. The equipment has a useful life of five years and a residual value of $69,000. Depreciation is calculated using the straight-line method. The expected net cash inflows from the investment are given below: Year 1 2 3 5 $203,000 150,000 OA. 14.45% OB. 11.55% OC. 5.78% D. 12.84% 168,000 98,000 131,000 $750,000 What is the accounting rate of return on the investment? (Round your answer to two decimal places.)

Sayer Tool Co. is considering investing in specialized equipment costing $620,000. The equipment has a useful life of five years and a residual value of $69,000. Depreciation is calculated using the straight-line method. The expected net cash inflows from the investment are given below: Year 1 2 3 5 $203,000 150,000 OA. 14.45% OB. 11.55% OC. 5.78% D. 12.84% 168,000 98,000 131,000 $750,000 What is the accounting rate of return on the investment? (Round your answer to two decimal places.)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 18EB: Garnette Corp is considering the purchase of a new machine that will cost $342,000 and provide the...

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