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The following relates to a proposed equipment purchase: Initial investment $ 155,000 Salvage value $ 4,000 Estimated useful life 4 years Annual net cash flows

The following relates to a proposed equipment purchase: Initial investment $ 155,000 Salvage value $ 4,000 Estimated useful life 4 years Annual net cash flows $ 51,600 Annual depreciation expense $ 37,750 The annual income amount used to calculate the accounting rate of return is:

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$51,600

$13,850

$14,850

$89,350

$50,600

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