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D After 5 Formal, Inc. is considering making an investment in a new cutting machine for its recently acquired Hollywood factory. The finance department is
D After 5 Formal, Inc. is considering making an investment in a new cutting machine for its recently acquired Hollywood factory. The finance department is working on the analysis for the manufacturing group to determine if the purchase of the equipment meets the company's investment objectives. It has been determined that the cost of the cutting machine is $1,575,000 and will have a useful life of ten (10) years. The net income for the Hollywood factory is $275,000 and the operating income is $325,000. The residual value of the equipment at the end of its 10-year life is $25,000. Calculate the return on investment for the purchase of the equipment. BIVA E12 Paragraph 2584
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