Nelson Corp

question 54

Multiple Choice

Nelson Corp.is considering the purchase of a new piece of equipment.The cost savings from the equipment would result in an annual increase in cash flow of $100,000.The equipment will have an initial cost of $400,000 and have a 5-year life.If the salvage value of the equipment is estimated to be $75,000,what is the accounting rate of return? Ignore income taxes.

• A)6.25%
• B)8.75%
• C)25.00%
• D)26.67%

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Definitions:

Occipital Bone

A bone at the lower back part of the skull, contributing to the cranial cavity's posterior wall and base.

Spinalis Cervicis

The spinalis cervicis is a muscle in the back of the neck that is part of the erector spinae muscle group, aiding in extending the cervical spine (neck).

Longus Colli

A deep muscle of the vertebral column, located in the neck region, responsible for flexing the neck and head.

Quadrates Lumborum

A muscle in the lower back on either side of the lumbar spine, playing a crucial role in stabilizing the pelvis and spine.