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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Ee 451.

Transcribed Image Text:(b)
Calculate the annual rate of return. (Round answer to 2 decimal places, e.g. 15.25%.)
Annual rate of return
eTextbook and Media
Save for Later
%
K
Attem

Transcribed Image Text:Attempt History
Current Attempt in Progress
Wildhorse Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. The
following information has been collected on this investment:
Cost
Old Equipment
Accumulated depreciation
Remaining life
Current salvage value
Salvage value in 8 years
Annual cash operating costs
$80,240
$40,300
8 years
$9,920
$0
$35,100
Cost
New Equipment
Estimated useful life
Salvage value in 8 years
Annual cash operating costs
$38,000
8 years
$4,800
$29,900
Depreciation is $10,030 per year for the old equipment. The straight-line depreciation method would be used for the new equipment
over an eight-year period with salvage value of $4,800.
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