Landrum Corporation is considering investing in specialized equipment costing $260,000. The equipment has a useful...
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Landrum Corporation is considering investing in specialized equipment costing $260,000. The equipment has a useful life of 5 years and a residual value of $15,000. Depreciation is calculated using the straightminusline method. The expected net cash inflows from the investment are: Year 1 $55,000 Year 2 $80,000 Year 3 $120,000 Year 4 $45,000 Year 5 $30,000 Total cash inflows $330,000 Landrum Corporation's required rate of return on investments is 20%. What is the accounting rate of return on the investment?
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