Moore Inc. is considering the purchase of new equipment costing $180,000. This equipment is expected...
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Accounting
Moore Inc. is considering the purchase of new equipment costing $180,000. This equipment is expected to the company to realize a decrease of $20,000 per-year in cash expenses. This equipment has an estimated useful life of 15 years, is assumed to have no salvage value at the end of its estimated useful life, and will be depreciated using the straight-line method. Based upon this information, the accounting rate of return for this new equipment would be
Group of answer choices
11.1%
4.4%
8.9%
22.2%
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