What is the accounting rate of return

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Question - Nylan Tiles is considering an investment in new equipment costing $850,000. The equipment will be depreciated on a straight-line basis over a five-year life and is expected to have a residual value of $54,000. The equipment is expected to generate net cash inflows of $1,000,000 in total during the five-year life. What is the accounting rate of return associated with the equipment investment?

10.79%

9.03%

49.10%

9.33%

Reference no: EM132099219

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