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Sunland Corp. management is considering purchasing a machine that will cost $117,250 and will be depreciated on a straight-line basis over a five-year period. The

Sunland Corp. management is considering purchasing a machine that will cost $117,250 and will be depreciated on a straight-line basis over a five-year period. The sales and expenses (excluding depreciation) for the next five years are shown in the following table. The companys tax rate is 34 percent.

Year 1 Year 2 Year 3 Year 4 Year 5

Sales

$126,450 $178,875 $246,455 $260,440 $266,125

Expenses

$139,410 $132,488 $147,289 $145,112 $130,556

Sunland will accept all projects that provide an accounting rate of return (ARR) of at least 45 percent.

Calculate accounting rate of return. (Round answer to 1 decimal place, e.g. 15.2%.)

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