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31. A company is considering purchasing factory equipment that costs $480000 and is estimated to have no salvage value at the end of its 8-year
31. A company is considering purchasing factory equipment that costs $480000 and is estimated to have no salvage value at the end of its 8-year useful life. If the equipment is purchased, annual revenues are expected to be $197400 and annual operating expenses exclusive of depreciation expense are expected to be $39000. The straight-line method of depreciation would be used. If the equipment is purchased, the annual rate of return expected on this equipment is
a) 66.0%.
b) 20.5%.
c) 41.0%.
d) 33.0%.
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