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The Hiroole Company is considering a new line of business. Starting the business will require an initial investment in equipment of $391,980. It is expected
The Hiroole Company is considering a new line of business. Starting the business will require an initial investment in equipment of $391,980. It is expected that the new business will increase net income by $38,120 per year for 5 years. The equipment will be depreciated over a 5-year period using straight-line depreciation with no residual value. Determine the accounting rate of return of the new business.
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