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Demarest Airlines is considering the purchase of telecommunications equipment costing 1,500,000. They expect this equipment to generate average annual operating income of 300,000 per year.
Demarest Airlines is considering the purchase of telecommunications equipment costing 1,500,000. They expect this equipment to generate average annual operating income of 300,000 per year. What is the payback period of this investment? What is its accounting rate of return? Please show your work in the space below.
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