A company projects an increase in net income of $148500 each year for the next five years if it invests $900000 in new equipment. The equipment has a 5-year life and an estimated salvage value of $300000. What is the annual rate of return on this investment? 24.8% 16.5% O33.4% 30.0%

A company projects an increase in net income of $148500 each year for the next five years if it invests $900000 in new equipment. The equipment has a 5-year life and an estimated salvage value of $300000. What is the annual rate of return on this investment? 24.8% 16.5% O33.4% 30.0%

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 17EB: Caduceus Company is considering the purchase of a new piece of factory equipment that will cost...

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please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly

A company projects an increase in net income of $148500 each year for the next five years if it invests $900000 in new equipment.
The equipment has a 5-year life and an estimated salvage value of $300000. What is the annual rate of return on this investment?
24.8%
16.5%
O33.4%
30.0%

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