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The following relates to a proposed equipment purchase: Cost Salvage value Estimated useful life Annual net cash flows Depreciation method $ 161,000 $ 7,000 4

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The following relates to a proposed equipment purchase: Cost Salvage value Estimated useful life Annual net cash flows Depreciation method $ 161,000 $ 7,000 4 years $ 54,600 Straight-line Ignoring income taxes, the annual net income amount used to calculate the accounting rate of return is: Multiple Choice $93,100 $52,850 $17,850 $54,600 $16.100

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