Bill Joyner is evaluating a new ticketing system for his theater. The system will cost $273,680 and will save the theater $57,850 in annual cash operating costs. Bill expects the new system to last 8 years, at which time the system will have a salvage value of $20,000. If Bill purchases the new system, he will be able to sell his existing system for $16,000. (a) Calculate the accounting rate of return for the proposed ticketing system.

(b) Bill Joyner wants to earn a minimum accounting rate of return of 9% on his projects. Should he invest in the new equipment?