Palmer Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $153,000. The equipment will have an initial cost of $510,000 and have a 7 year life. If the salvage value of the equipment is estimated to be $27,000, what is the accounting rate of return?

Multiple Choice

• 19.28%

• 30.00%

• 47.11%

• 152.37%