Question
Cass Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in
Cass Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $220,000. The equipment will have an initial cost of $1,000,000 and have a 8 year life. If there is no salvage value of the equipment, what is the accounting rate of return?
Multiple Choice
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14.5%
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44.0%
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17.0%
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22.0%
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Accounting What the Numbers Mean
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,
9th Edition
978-0073527062
