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Tempo Milling is evaluating a proposal to invest in a new piece of equipment costing $50,000 with the following annual cash flows over the equipment's
Tempo Milling is evaluating a proposal to invest in a new piece of equipment costing $50,000 with the following annual cash flows over the equipment's 5-year useful life: Cash revenues $50,000 Cash expenses (30,000 ) Depreciation expenses (straight-line) (10,000 ) Income provided from equipment $10,000 Cost of capital 14 percent The accounting rate of return on initial investment is: Select one: A. 20.00 percent B. 30.00 percent C. 16.30 percent D. 25.56 percent
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