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:

Nineteenth Century

the period from 1801 to 1900, marked by significant industrial, cultural, and political changes globally.

Competition For Attention

The rivalry between entities to capture and hold the focus or interest of an audience, especially prevalent in media, advertising, and entertainment.

Obsessions

Persistent, unwanted thoughts, urges, or images that cause distress or anxiety.

Compulsions

Repetitive behaviors or mental acts that a person feels driven to perform in response to an obsession, often to reduce distress or prevent a feared event.