Newport Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $251,020. The equipment will have an initial cost of $924,000 and have a 6 year life. There is no salvage value for the equipment. What is the accounting rate of return? Ignore income taxes. Multiple Choice 10.50% 2717% 54.34% 16.67%

Newport Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $251,020. The equipment will have an initial cost of $924,000 and have a 6 year life. There is no salvage value for the equipment. What is the accounting rate of return? Ignore income taxes. Multiple Choice 10.50% 2717% 54.34% 16.67%

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 7EA: A mini-mart needs a new freezer and the initial Investment will cost $300,000. Incremental revenues,...

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