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 $147,560. The equipment will have an initial cost of $476,000 and have a 7 year life. If the salvage value of the equipment is estimated to be $21,000, what is the accounting rate of return?

Multiple Choice

• 31.00%

• 48.11%

• 153.37%

• 20.28%