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A company is considering purchasing factory equipment which costs $960,000 and is estimated to have no salvage value at the end of its 8-year useful
A company is considering purchasing factory equipment which costs $960,000 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 $450,000 and annual operating expenses exclusive of depreciation expense are expected to be $190,000. The straight-line method of depreciation would be used. If the equipment is purchased, the annual rate of return expected on this project is: A. 54.2%. B. 29.2%. C. 27.1%. D. 14.6%
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