Newport Corporation is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net cash flow of $423,440. The equipment will have an initial cost of $1,896,000 and a 12-year useful life with no expected salvage value. What is the accounting rate of return? Multiple Choice 22.33% 14.00% 8.33% 44.66%
Newport Corporation is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net cash flow of $423,440. The equipment will have an initial cost of $1,896,000 and a 12-year useful life with no expected salvage value. What is the accounting rate of return? Multiple Choice 22.33% 14.00% 8.33% 44.66%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Newport Corporation is considering the purchase of a new piece of equipment. The cost savings from the equipment would result
in an annual increase in net cash flow of $423,440. The equipment will have an initial cost of $1,896,000 and a 12-year useful life
with no expected salvage value. What is the accounting rate of return?
Multiple Choice
22.33%
14.00%
8.33%
44.66%
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