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Business, 28.04.2021 16:50 dylanolmeda9

XYZ Company is considering buying equipment for $600,000. The equipment has an estimated life of 4 years and no salvage value. The estimated net income and net cash flow from the investment are as follows: Year After tax Net Income Net Cash Flow 1 $ 90,000 $210,000 2 80,000 200,000 3 40,000 160,000 4 30,000 150,000 $240,000 $720,000 Calculate the accounting rate of return on this investment. Hint: calculate the average annual after-tax income.

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