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Payback, Accounting Rate of Return, Net Present Value, Internal Rate of Return Blaylock Company wants to buy a numerically controlled (NC) machine to be used

Payback, Accounting Rate of Return, Net Present Value, Internal Rate of Return

Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines. The outlay required is $800,000. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow:

Year Cash Revenues Cash Expenses
1 $1,600,000 $1,308,000
2 1,600,000 1,308,000
3 1,600,000 1,308,000
4 1,600,000 1,308,000
5 1,600,000 1,308,000

Required:

Compute the NC equipments ARR. Enter as a percent and round your answer to one decimal place. Accounting rate of return = %

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