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The management of Texas Avocado Corporation is considering the purchase of a new machine costing $800,000, with no expected salvage value. The company's desired rate

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The management of Texas Avocado Corporation is considering the purchase of a new machine costing $800,000, with no expected salvage value. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909. 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability in this situation: Year Operating l come $120,000 80,000 20,000 10,000 10,000 Net Cash Flow $180,000 120,000 100,000 90,000 90,000 The Accounting Rate of Return for this investment is: 20% 16% 12% 8%

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