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Company is using an old piece of machinery in its operations. The company is considering purchasing a new piece of equipment to replace the old
Company is using an old piece of machinery in its operations. The company is considering purchasing a new piece of equipment to replace the old machine. The new equipment is more efficient and thus is expected to provide an annual cost savings of $41,390. In addition, the old piece of machinery can be sold for $7,500 at the time the new equipment is purchased. The new equipment Company is considering buying costs $217,000 and is expected to last 8 years. The new equipment would have a salvage value of $13,280 at the end of the nine years. The accounting rate of return on the new equipment would be closest to: O 7.34% 7.59% 6.82% 8.49% 0 7.40% 7.83% 6.57% 8.23% 7.04% 7.61% 6.81% 7.64% none of the above choices are correct
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