Metropolis health systems-compute unadjusted rate of return

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Reference no: EM131625333

Metropolis Health Systems’ Laboratory Director expects to purchase a new piece of equipment. The assumptions for the transaction are as follows:

Average annual net income = $70,000

Original investment amount = $410,000

Unrecovered asset cost at the end of useful life (salvage value) = $41,000

Required

Compute the unadjusted rate of return using the original investment amount.

Compute the unadjusted rate of return using the average investment method.

Reference no: EM131625333

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