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Carmino Company is considering an investment in equipment that is expected to generate an after-tax income of $5,000 for each year of its four-year life.
Carmino Company is considering an investment in equipment that is expected to generate an after-tax income of $5,000 for each year of its four-year life. The asset has no salvage value. The firm is in the 30% tax bracket. The net book value (NBV) of the investment at the beginning_of each year is expected to be as ollows: Calculate this asset's accounting (book) rate of return (ARR) on average investment (which is defined as a simple average of the average book value of the asset each year of its four-year life). Round the final answer to the nearest whole \%. Multiple Choice 43%. 36%. 15%. 27%. 58%
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