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ABC Company has gathered the following information related to an investment in new equipment: annual net cash inflows ....................... $ 38,230 initial investment ............................ $180,000
ABC Company has gathered the following information related to an investment in new equipment: annual net cash inflows ....................... $ 38,230 initial investment ............................ $180,000 life of new equipment ......................... 10 years salvage value of new equipment in 10 year ..... $ 20,000 cost of capital ............................... 10% If the new equipment is purchased, the old equipment that is currently in use can be sold for $9,000. Calculate the accounting rate of return on the new equipment. Enter your answer as a whole number. For example, if you come up with 10% as the accounting rate of return, simply enter 10 as your answer. Do not enter your answer as a decimal or with a percentage symbol (so do not enter .10 or 10%).
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