Fletcher Corp

question 51

Multiple Choice

Fletcher Corp.is considering the purchase of a new piece of equipment.The equipment will have an initial cost of $400,000,a 5-year life,and a salvage value of $75,000.If the accounting rate of return for the project is 10%,what is the annual increase in net cash flow? Ignore income taxes.

• A)$25,000
• B)$40,000
• C)$65,000
• D)$105,000

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Definitions:

Prototype

An early sample, model, or release of a product built to test a concept or process, serving as a thing to be replicated or learned from.