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QUESTION 27 Tucker company is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an
QUESTION 27 Tucker company 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 of $80,000. The equipment will have an initial cost of $200,000 and have a 10-year life. There is no salvage value of the equipment. The hurdle rate is 20%. Ignore income taxes. What is the accounting rate of return? 40% 25% O 50% O 20% QUESTION 28 Refer to Tucker company. What is the payback period? 4 years O 2.5 years O 2 years O3 years
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