Question 2 of 7 Tamarisk Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment: Old Equipment Accumulated depreciation Remaining life Current salvage value Salvage value in 8 years Annual cash operating costs (a) $80,400 Cost $40,500 8 years $10,280 $0 $35,800 Your answer is correct. New Equipment Estimated useful life Salvage value in 8 years Annual cash operating costs 5/20 $40,800 8 years $4,800 $29,600 Depreciation is $10,050 per year for the old equipment. The straight-line depreciation method would be used for the new equipment over an eight-year period with salvage value of $4,800.

Calculate the annual rate of return. (Round answer to 2 decimal places, e.g. 15.25%.) Annual rate of return % eTextbook and Media Calculate the annual rate of return. (Round answer to 2 decimal places, e.g. 15.25%.) Annual rate of return % eTextbook and Media