Account rate of return associated with equipment investment

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Reference no: EM13827384

Nylan Tiles Company is considering an investment in new equipment costing $850,000. The equipment will be depreciated on a straight line basis over 5 year life and is expected to have a salvage value of $50,000. The equipment is expected to generate net cash inflows of $1,000,000 in total during the 5 year life. What is the account rate of return associated with the equipment investment?

A) 8.89%

B) 9.32%

C) 7.56%

D) 9.99%

Reference no: EM13827384

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