Pilot Corporation Is Considering the Purchase of Equipment Costing $100,000

question 35

Multiple Choice

Pilot Corporation is considering the purchase of equipment costing $100,000.The equipment will reduce operating cash expenses by $25,000 each year.The new equipment has a salvage value of $2,000 and will be depreciated over a 10-year useful life.The accounting rate of return is closest to

• A)15.2%.
• B)25%.
• C)25.5%.
• D)35%.

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Definitions:

Growth Hormone

A substance secreted by the pituitary gland that promotes growth, cell reproduction, and cell renewal in humans and various animals.

Hyperthyroidism

A condition characterized by the overproduction of thyroid hormones, leading to a variety of systemic effects.

Mineralocorticoids

A type of steroid hormone that regulates salt and water balances in the body.

Electrolyte Balances

The levels of minerals in the body that have an electric charge, crucial for nerve and muscle function, hydration, blood pH, and other processes.