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Palmer Corp. is considering the purchase of a new piece of equipment. The cost savings...

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Accounting

Palmer Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $141,750. The equipment will have an initial cost of $525,000 and have a 7 year life. If the salvage value of the equipment is estimated to be $14,000, what is the accounting rate of return?

149.37%

44.11%

27.00%

16.28%

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