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%
Chapter11: Capital Budgeting Decisions
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![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%
27.17%
54.34%
16.67%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F40fbe775-880f-4c79-b06d-e4363ba6defc%2F358881dd-8996-48b1-90f0-01fb1032286a%2Fkfw8g4w_processed.png&w=3840&q=75)
Transcribed Image Text: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%
27.17%
54.34%
16.67%
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