Nelson Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $131,990. The equipment will have an initial cost of $485,000 and have a 5 year life. If the salvage value of the equipment is estimated to be $150,000, what is the accounting rate of return? Ignore income taxes. 28.88%. 27.21%. 10.90% 13.40%.