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Watrous Company is considering the purchase of a new machine that will cost $270,000. This new machine will generate net cash inflows of $70,000 each
Watrous Company is considering the purchase of a new machine that will cost $270,000. This new machine will generate net cash inflows of $70,000 each year during its 10-year useful life and has a $12,000 salvage value at the end of the ten years. The machine currently in use can be sold for $10,000 if the new machine is purchased. Calculate the accounting rate of return on the new machine.
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