Problem 3 XYZ Company is considering buying equipment for $600,000. The equipment has an estimated life of 4 years and no salvage value. The estimated net income and net cash flow from the investment are as follows: Year 1 2 3 After tax Net Income $ 90,000 80,000 40,000 30,000 $240,000 Net Cash Flow $210,000 200,000 160,000 150,000 $720,000 Calculate the accounting rate of return on this investment. Hint: FIRST calculate the average annual after-tax income