Nylan Tiles Is Considering an Investment in New Equipment Costing

question 127

Multiple Choice

Nylan Tiles is considering an investment in new equipment costing $850,000.The equipment will be depreciated on a straight-line basis over a five-year life and is expected to have a residual value of $54,000.The equipment is expected to generate net cash inflows of $1,000,000 in total during the five-year life.What is the accounting rate of return associated with the equipment investment? (Round your answer to two decimal places.)

• A) 10.79%
• B) 9.03%
• C) 49.10%
• D) 9.33%

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Definitions:

Environmental Tobacco Smoke

Also known as secondhand smoke, it refers to the mixture of smoke from the burning end of a cigarette and the smoke exhaled by smokers, which can pose health risks to non-smokers.

Passive Smoking

The exposure of nonsmokers to the smoke of spouses, parents, or coworkers; environmental tobacco smoke.

Lung Cancer

A type of cancer that begins in the lungs and is often associated with smoking, characterized by uncontrolled cell growth in lung tissue.

Smoking Rates

The prevalence or incidence of tobacco smoking in a population, often measured as the percentage of individuals who smoke.