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Bowen is considering the purchase of equipment costing $150000. The equipment has a 12 - year useful life, has an estimated salvage value of zero,
Bowen is considering the purchase of equipment costing $150000. The equipment has a 12 - year useful life, has an estimated salvage value of zero, and is expected to generate $25000 in annual cash flows. The company has a 10% required rate of return and uses the straight-line depreciation method. The accounting rate of return on this equipment is closest to 6.7% 8.3% 10.0% 25.0%
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