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Cowell Corporation is considering an investment in new equipment costing $155,000. The equipment will be depreciated on a straightminusline basis over a fiveyear life and
Cowell Corporation is considering an investment in new equipment costing $155,000. The equipment will be depreciated on a straightminusline basis over a fiveyear life and is expected to generate net cash inflows of $45,000 the first year, $65,000 the second year, and $90,000 every year thereafter until the fifth year. What is the accounting rate of return for this investment? The equipment has a $5,000 residual value.
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