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Explain how this went Landrum Corporation is considering investing in specialized equipment costing $220,000. The equipment has a useful life of 5 years and a
Explain how this went
Landrum Corporation is considering investing in specialized equipment costing $220,000. The equipment has a useful life of 5 years and a residual value of $20,000. Depreciation is calculated using the straight - line method. The expected net cash inflows from the investment are Year 1 Year 2 Year 3 Year 4 Year 5 Total cash inflows $45,000 $50,000 $90,000 $65,000 $35,000 $285,000 Landrum Corporation's required rate of return on investments is 13% What is the accounting rate of return on the investment? A, 773% OB. OC. 25.91% 5.96% D. 18.18%Step by Step Solution
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