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Newport Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in

Newport 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 $200,000. The equipment will have an initial cost of $900,000 and have a 6-year life. There is no salvage value for the equipment. What is the accounting rate of return? Ignore income taxes.

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