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What would the average rate of return or accounting rate

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Problem 1: In deciding to purchase or lease a new dictation system, the Director of HI Services calculated the payback period, the internal rate of return and NPV on the investment. The hospital's required payback is 3 years with a required rate of return of 20%. If the equipment costs $32,000 and generates $8,000 per year in savings for 3 years, and $7,040 of Average NI. What would the average rate of return or accounting rate of return for this equipment?

a . 22%

b. 400%

C. 4%

d. 20%

Reference no: EM132825329

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