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Suppose that a new machine tool having a useful life of only one year costs $ 8 0 , 0 0 0 . Suppose, also,

Suppose that a new machine tool having a useful life of only one year costs $80,000. Suppose, also, that the net additional revenue resulting from buying this tool is expected to be $96,000. The expected rate of return on this tool is
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20 percent.
8 percent.
2 percent.
80 percent.

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