Addison Corp

question 19

Multiple Choice

Addison Corp.is considering the purchase of a new piece of equipment.The equipment will have an initial cost of $900,000,a 6-year life,and no salvage value.If the accounting rate of return for the project is 5%,what is the annual increase in net cash flow? Ignore income taxes.

• A)$45,000
• B)$105,000
• C)$150,000
• D)$195,000

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