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9A Darth Company is considering the purchase of new heavy construction equipment that will cost $2,000,000 and have a life of 8 years with no
9A Darth Company is considering the purchase of new heavy construction equipment that will cost $2,000,000 and have a life of 8 years with no expected salvage value. The expected cash flows associated with the project are as follows: Year Cash Revenues Cash Expenses & Depreciation 1 $2,400,000 $1,900,000 2 $2,400,000 $1,900,000 3 $2,400,000 $1,900,000 4 $2,400,000 $1,900,000 5 $2,400,000 $1,900,000 6 $2,400,000 $1,900,000 7 $2,400,000 $1,900,000 8 $2,400,000 $1,900,000 What is the average annual income for this project? $2,400,000 $1,900,000 $500,000 $62,500 $300,000 Question 9B What is the accounting rate of return for the project? 25% 3.125% 400% 83.33% 120%
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