Prescott Corporation is considering an investment in new equipment costing $928,000 The equipment will be depreciated on a straight-line basis over a ten-year site and is expected to have a residual value of $106.000. The equipment is expected to generate net cash inflows of $144,000 for each of the first five years and $102,000 for each of the last five years. What is the accounting rate of return associated with the equipment investment? (Round your answer to two decimal places)
Prescott Corporation is considering an investment in new equipment costing $928,000 The equipment will be depreciated on a straight-line basis over a ten-year site and is expected to have a residual value of $106.000. The equipment is expected to generate net cash inflows of $144,000 for each of the first five years and $102,000 for each of the last five years. What is the accounting rate of return associated with the equipment investment? (Round your answer to two decimal places)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 10E: Roberts Company is considering an investment in equipment that is capable of producing more...
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